Growth in eurozone money supply slowed in February for the fifth straight month and private lending held firm, according to data on Friday that showed an uncertain economic outlook.
Loans to the private sector inched upward to 5.5 percent in February from a 5.4 percent seasonally-adjusted annual rate in January, within its recent range, the European Central Bank reported.
But household lending, a sector of the economy the ECB is watching closely to boost the pace of recovery, showed no improvement. It slipped to 6.6 percent in February from 6.7 percent in January before seasonal adjustment.
A slight upward trend in credit growth has been in place since June of last year, showing that consumers and businesses have started to take out more credit. But analysts said the slow pace of improvement reflects their caution.
ECB President Jean-Claude Trichet earlier this week said that if the consumer flags, the central bank would have to re-examine its monetary policy. It next meets on April 1.
Money in checking and savings accounts, known as M3, expanded at a 6.3 percent annual rate in February, a slight slowdown from January's 6.5 percent rate in January, the ECB said.
The three-month moving average for M3 growth was a 6.6 percent annual rate, down from 7.0 percent in the prior three months. High money growth can be a harbinger of inflationary pressures, but analysts said this number is not too worrying.
"M3 makes the ECB hesitate, but it is not an obstacle to recovery if growth remains sluggish," said Christoph Balz, economist at Commerzbank in Frankfurt.
Analysts said they would have expected more downward shift in M3 at this stage of the recovery as people move money out of low-yielding bank accounts into more productive investments, so the slow pace reflects their uncertainty about the recovery.
Moreover, money supply growth was extremely high last year as investors, disturbed by prospects for the Iraqi war, held large amounts of cash in bank accounts, so levels had been expected to fall more this year.