The rate of growth in euro zone bank loans to the private sector declined slightly in December, the European Central bank said today, signalling that growth could slow across the 17-nation region.

Lending expanded by 1.9% from the same month a year earlier, down from 2% in November, an ECB spokesman said, interrupting a trend upwards since April.

The central bank also said that euro zone money supply as measured by its M3 indicator grew by 1.7% in December, a rate that was also lower than the solid increase of 2.1% the previous month.

The ECB regards this figure as a key guide to pressures likely to affect inflation in the medium term.

Lending and money supply data are widely-followed indicators of consumer demand and overall economic activity. Rising figures point to increased demand, which normally means inflation could also begin to pick up and incite the ECB to raise interest rates.

The ECB has kept its key interest rate at a historic low of 1% since May 2009 and economists do not expect a change in the near future.