Martin van Vliet, an economist at ING said that the European Central Bank will slowly unwind its unconventional policy measures in the first half of 2010, before embarking on a gradual interest rate rising campaign later in the second half of next year.
The ECB data showed that M3, a measure of broad money supply turned negative in November with a 0.2% year-on-year fall, reversing an annual growth of 0.3% in October. Loans to private sector fell 0.7%, which was the third consecutive fall.
The economist said the subdued overall bank lending and broad money figures suggest there is still no threat of inflation in the foreseeable future. According to van Vliet, a positive growth in lending to households is encouraging news as household borrowing generally tends to lead the business cycle.
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