Euro zone M3 money supply growth posted a surprising sharp slowdown in June.
The European Central Bank (ECB) said today annual M3 growth slowed to 7.1 per cent from a revised 7.7 per cent reading in May.
This was still way above the bank's 4.5 per cent benchmark for its inflation barometer but below a consensus forecast of 7.7 per cent.
The news reinforced expectations the ECB will keep interest rates steady in the face of volatile financial markets. The ECB did not comment on the data, but analysts believe that uncertainty about the strength of economic recovery, highlighted by recent sharp stock market sell-offs, will keep the ECB on hold at least until after its August summer break.
The less volatile M3 three-month average stabilised at 7.4 per cent in the April-June period, the ECB said.
Credit growth to the private sector, which the ECB also watches closely, was also steady at an annual rate of 5.4 per cent.