FRANKFURT | Fri Oct 25, 2013 4:20am EDT
FRANKFURT Oct 25 (Reuters) - Loans to households and companies in the euro zone contracted further in September, strengthening the case for the European Central Bank to take fresh policy action to support the currency bloc's fragile recovery.
The ECB discussed cutting interest rates earlier this month but decided to leave them unchanged. A firming euro and a growth slowdown this month may boost the case for action, though most economists expect rates to remain at 0.5 percent, a record low.
Despite taking steps to revive lending to the small- and mid-sized firms that form the backbone of the euro zone economy, the ECB's record low interest rates are not feeding through evenly to the real economy in all corners of the currency bloc.
Data released on Friday showed loans to the private sector shrank by 1.9 percent in September from the same month a year ago, in line with a Reuters poll of economists.
Euro zone M3 money supply - a more general measure of cash in the economy - grew at an annual pace of 2.1 percent, slowing from 2.3 percent in August and below the consensus forecast of 2.4 percent in a Reuters poll of analysts. (Writing by Paul Carrel)
