Eurozone private sector lending edges up in May

Bank lending to the private sector in the eurozone picked up slightly in May, the European Central Bank said on Monday, a sign of stronger economic activity in the 16-nation bloc.

Lending increased by 0.2 percent from the level in May 2009, a bank spokesman said.

In April, private sector loans had risen by 0.1 percent.

Growth of the ECB's M3 money supply indicator, which measures cash, deposits and several other financial benchmarks, decreased by 0.2 percent in May, following a similar decline in April.

Lending and money supply data are indicators of consumer demand and overall economic activity.

Falling figures point to lower demand, which normally means inflation will ease and allow the ECB to cut interest rates. However, rates are already at a record low of one percent and are not expected to be cut further.

The eurozone emerged from recession last year and is now trying to nurture its recovery as its leaders tackle excessive deficit and debt in most of its member countries.