Lending to the eurozone private sector grew at a steady pace of 1.2 per cent in September from the equivalent amount last year, the European Central Bank said yesterday.

This meant that lending, a vital measure of the vigour of credit activity, grew at the same rate as in August, a bank spokesman said.

“In sum, the still subdued ex-pansion (or even stagnation month/month) of credit aggregates – so far the major source for money production – suggests that the recovery of bank lending remains gradual for now,” Barclays Capital economist Thorsten Polleit said.

Commerzbank economist Michael Schubert added that “things have to improve much further, before ECB president Trichet, to use his own words, can declare victory.

“We stick to our forecast that the ECB will leave rates unchanged (at one per cent) over a long time span,” Schubert concluded.

The ECB said that the eurozone money supply, as measured by the so-called M3 indicator, grew by one per cent in September, slightly less than the rate of 1.1 per cent seen in August.

The ECB regards the M3 figure as the key guide to pressures likely to affect inflation in about 18 months’ time.

It has set a medium-term target for inflation of just under two per cent.

But owing to the depressive effects of the global economic crisis, the ECB has also been wary of growth of the money supply becoming too weak, which would raise concerns of deflation.

In Germany, the biggest eurozone economy, credit hurdles diminished further in October, a survey by the Ifo economic research institute found.