Euro area money supply growth accelerates in December

Euro are money supply growth perked up slightly in December, a positive development according to economists.

In annual terms, the broadest measure of 'money' in circulation, known as M3, picked up from a 4.8% pace in November, and 4.5% in October, to 5.0% in December, beating forecasts for a tick higher to 4.9%.

That, Fabio Fois at Barclays said, came amid a pick-up in private lending - "albeit at a low pace" - following three months of stalled loans.

"Moreover, the December report shows that the flow of deposits placed by non-financial corporations declined remarkably after spiking in November, suggesting the previous month’s rise was not driven a shift in risk aversion, which could have dampened private investment outlook," Fois said in a research report sent to clients.

Looking at the narrowest monetary aggregate, M1, Fois highligted the lower demand for cash and lessened overnight deposits.

At the M3 level, and on the counterpart side of things, the rate of lending to non-financial corporations rose from 2.1% to 2.3%.

In parallel, loans extended over a five-year time frame grew faster, by 2.2% versus 2.0% in November and 1.8% in October.