Money supply growth and loans to the private sector accelerated unexpectedly in the euro zone in January, the European Central Bank (ECB) said today.
Annual growth in M3 rose to 7.6 per cent in January from 7.3 per cent in December, while loans to the private sector picked up to a 9.7 per cent annual rate from 9.2 per cent, the ECB said.
The figures are likely to give little comfort to the ECB, which monitors money and credit growth as an indicator of medium term inflation risks, when its governing council meets to set interest rates on Thursday. It is widely expected to tighten credit at that meeting.
M3 growth has long been above the 4.5 per cent that the ECB says is consistent with medium-term price stability. Loans to the private sector - a credit growth measure that is not distorted by changes in investors' portfolios - sped up to 9.7 per cent in January from an upwardly revised 9.2 per cent before.
The three-month moving average for M3 growth slowed to 7.5 per cent from 7.6 per cent.
Several ECB policymakers have cited money and credit growth as a risk to stable prices, and the central bank is widely expected to raise interest rates by a quarter percentage point to 2.5 per cent when it meets on Thursday.