The European Central Bank has said growth in the euro zone money supply edged further downwards in May and that the rate of growth in loans to the private sector was again sharply lower.
Annual growth in the ECB's M3 indicator was 3.7%, down from 4.9% in April, a bank spokesman said. The money supply indicator measures cash, deposits and various other financial items.
A falling figure points to lower demand in the economy, which normally means inflation will ease and so allow the ECB to cut interest rates. These are now at a record low of 1%, however, and are not expected to be cut further.
On a three-month basis that smoothes out exceptional movements, M3 growth fell to 4.5% in the period from March to May from 5.2% in February-April.
Growth in lending to the private sector compared with a year earlier fell sharply in May to 1.8% from a revised 2.3% in April. Loans had already posted a steep fall in April from the previous month, and euro zone businesses have reported that credit is getting tighter, which could hamper a recovery from the recession.
