The European Central Bank said today that growth in the euro zone money supply eased sharply in November, a sign that inflation was set to decrease further.
Growth in the ECB's M3 indicator was 7.8%, down from 8.7% in October, a bank spokesman said. Analysts had expected growth to ease to 8.5%.
The money supply indicator measures cash, overnight deposits, other short-term deposits, repurchase agreements, shares and units in money market funds and debt securities with a maturity of up to two years.
A falling figure points to lower demand in the economy, suggesting that inflation will ease and so allow the ECB to cut interest rates.
On a three-month basis, which smoothes out exceptional movements, M3 growth eased to 8.4% in September to November from 8.7%in the August-October period. For the three month period, analysts had forecast growth of 8.6%.
Growth in lending to the private sector compared with a year earlier also declined in November to 7.1% from 7.8% in October, the ECB said.
