[FRANKFURT] Loans to the private sector in the euro area, a gauge of economic health, have started growing again, suggesting the European Central Bank's monetary policy is gradually working, ECB data showed on Friday.
After long months of contraction, the volume of loans to private businesses and households increased by 0.5 per cent May compared with the same month in 2014, the ECB said in a statement.
The previous month, private sector loans had stagnated.
The long and deep financial crisis in the 19 countries that share the euro has squeezed lending, thus dampening economic activity. But the ECB has launched a raft of different policy measures to get credit flowing again, most significantly a massive programme to buy more than one trillion euros worth of public sector bonds to pump liquidity into the system.
And those measures are now beginning to make themselves felt, the ECB data showed.
The overall eurozone money supply grew five per cent in May from a year earlier, slower than the 5.3 per cent recorded in April.
The ECB regards M3 money supply as a barometer for future inflation.