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Eurozone loans to private sector still contracting: ECB

[FRANKFURT] Loans to the private sector in the euro area, a gauge of economic health, fell year-on-year in November, but by slightly less than in October, the European Central Bank said on Tuesday.

The volume of loans to private businesses and households declined by 0.9 per cent in November compared with the same month in 2013, a slightly lower rate than the drop of 1.1 per cent recorded in October, the ECB said in a statement.

The long and deep financial crisis in the 18 countries that share the euro has squeezed lending, thus dampening economic activity.

The overall eurozone money supply grew 3.1 per cent in November from a year earlier, faster than the 2.5 per cent recorded in October.

The ECB regards M3 money supply as a barometer for future inflation.