ECB Says Eurozone Money Supply Growth Edges Higher in July

Growth in Eurozone money supply, a key indicator of demand in the economy, edged higher in July, the European Central Bank said on Friday.

The M3 indicator rose 2.0 percent following a gain of 1.9 percent in June.

The ECB had initially estimated the increase in June at 2.1 percent and analysts polled by Dow Jones Newswires had penciled in a rise of 2.2 percent in July.

The ECB regards the M3 figure as a key guide to inflation pressures and uses it to set interest rates accordingly.

The central bank seeks to keep Eurozone inflation below but close to 2.0 percent but it stood at 2.5 percent in July.

Meanwhile, the rate of growth in Eurozone bank loans to the private sector slowed slightly in July, the ECB said.

Lending increased by 2.4 percent compared with the same month last year but that was a small decline from the 2.5 percent level registered in June.

The central bank raised its benchmark interest rate to 1.50 percent last month to contain inflation but is now expected to sit tight for the next few months, at least, owing to a sharp slowdown in the Eurozone economy.