FRANKFURT, March 27 Lending to households and
firms in the euro zone shrank further in February and money
supply growth remained subdued, adding to the European Central
Bank's list of concerns ahead of its policy meeting next week.
The ECB has cut interest rates close to zero, pumped extra
liquidity into the banking system and announced a fresh
government bond purchase programme, but the measures have so far
not managed to unclog lending to the real economy.
Euro zone inflation is also running far below the ECB's
target of just under 2 percent, hitting 0.7 percent in February.
Loans to the private sector fell by 2.2 percent in February
from the same month a year earlier, ECB data released on
Thursday showed. That compared to a contraction of 2.3 percent
Euro zone M3 money supply - a more general measure of cash
in the economy - grew at an annual pace of 1.3 percent, picking
up slightly from 1.2 percent in January.
The ECB holds its next policy meeting on April 3.
(Reporting by Eva Taylor and Jonathan Gould)