Lending to euro zone private sector drops in June: ECB

Loans to firms and households declined in June, fuelling expectations that the European Central Bank (ECB) may have do more to stimulate the ailing Eurozone economy when it meets next week to set the bloc's interest rates.

Loans to the private sector fell 0.2 per cent from the same month a year ago, in line with expectations of economists polled by Reuters beforehand.

The flow of loans to non-financial firms fell €1bn (£784m) after it fell by €6bn in May. The monthly flow of loans to households showed a drop of €2bn compared with unchanged flows the previous month.

Eurozone M3 money supply - a more general measure of cash in the economy - grew at an annual pace of 3.2 per cent in June, picking up from 3.1 per cent in May and above the consensus of 2.9 per cent from analysts polled,