Real euro area 'narrow money' growth falling, pointing to slower growth

Money supply growth in the single currency bloc continued to slow in September and in real terms pointed to further downside risks for economic growth, economists said.

According to the European Central Bank, the annual rate of growth in the M3 monetary aggregate declined from 7.9% in August to 7.4% for September.

Economists had penciled-in a more moderate slowdown to 7.6%.

Within that, the closely-watched M1 aggregate - which is also known as the "narrow money supply" - grew at an 11% pace year-on-year, the same as in August.

While the data were "robust", Claus Vistesen, chief euro area economists at Pantheon Macroeconomics, pointed out how due to inflation now rising "sharply", real or inflation-adjusted M1 growth was in fact falling and pointing to slower growth in gross domestic product two to three quarters out.

"This isn’t controversial, but risks at this point are tilted towards a sharper slowdown than the consensus and ECB expects."