Euro-zone money supply growth, one of the pillars of the European Central Bank's monetary policy, accelerated for the eighth month in a row in November, rising at an annual rate of 8 per cent against 7.4 per cent in October. But economists said the rise in money supply, seen as a guide to future inflation trends, was unlikely to be a constraint on the ECB's monetary stance, although it might create "a presentational problem" should the bank want to cut interest rates early in the new year.
Most economists expect the ECB, which meets again on January 3rd, to cut interest rates in the first quarter of 2002.
The more closely watched three-month moving average for M3 grew at a year-on-year rate of 7.4 per cent against a revised rate of 6.7 per cent in October.
The increase took M3 growth to its highest level since the launch of the single currency, pushing it way above the ECB's reference rate of 4.5 per cent that it believes is compatible with price stability.
But the bank played down the surge in money supply and again indicated it believed much of the rise reflected the flight to short-term assets by investors after the September 11th attacks on the US.
ECB officials have been arguing for some months now that the rise in money supply reflected statistical distortions linked to non-resident holdings of short-term monetary instruments.
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