FRANKFURT, Oct 28 () - Money supply growth slowed significantly in September although it remained at high levels while private credit was little changed, the European Central Bank said on Tuesday in a report that suggested recovery is on track for the 12-nation euro zone. Growth in credit granted to households and businesses stood at 5.5 percent last month, almost the same as 5.6 percent annual rate in August, a sign that the private sector continues to expand its activities. ECB policymakers are watching credit growth closely as an early indicator for recovery while money supply gains less immediate attention since it has lost its early predictive value for inflationary pressures. However, policymakers could gain some solace in October that the large buildup of cash in bank accounts concerns was retreating, calming concerns that it could fuel a spending spree as economic recovery accelerates.
The growth rate for M3, a broad measure of money in bank checking and savings accounts, declined to a 7.4 percent year-on-year rate in September, weaker than the 7.8 percent rate analysts polled by on average expected and down from the 8.2 percent seasonally adjusted rate in August. The three-month moving average for M3 stood at 8.1 percent in September, compared with 8.4 percent in the prior period. //