Europe Loan Growth Accelerated in October, ECB Says
Loans to households and companies in Europe grew at the fastest pace in 16 months in October as the economic recovery boosted demand for finance.
Loans to the private sector rose 1.4 percent from a year earlier after growing an annual 1.2 percent in September, the European Central Bank in Frankfurt said today. That’s the fastest since June 2009. The rate of growth in M3 money supply, which the ECB uses as a gauge of future inflation, eased to 1 percent from 1.1 percent in the previous month.
“We’ve seen the low point, the moderate upward trend in credit growth should continue in coming months,” said Michael Schubert, an economist at Commerzbank AG in Frankfurt. Still, “the ECB can keep interest rates low for a protracted period as there are no inflation pressures.”
In the three months through October, M3 increased 1.1 percent from the same period a year earlier after gaining an annual 0.8 percent in the three months through September, the ECB said. M3 is the broadest gauge of money supply and includes cash in circulation, some forms of savings and money-market holdings. The annual rate of M1 money-supply growth decreased to 4.9 percent from 6.2 percent.
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