| Consensus | Consensus Range | Actual | Previous | |
| Y/Y - 3-Month Moving Average | 2.8% | 2.7% to 3.0% | 2.8% | 3.0% |
| Private Sector Lending -Y/Y | 2.9% | 2.7% |
Highlights
The latest monetary developments suggest a cautiously improving financial environment, marked by steady liquidity and gradually strengthening credit conditions. Broad money (M3) maintained an annual growth rate of 2.8 percent in October 2025, and 2.8 percent over the three months to October, signalling stability in overall monetary expansion and aligning with the consensus forecast. A more dynamic shift is visible in the narrower M1 measure, which rose to 5.2 percent, reflecting stronger demand deposits and increased cash circulation, often interpreted as an early sign of rising consumer confidence and improved transaction activity.
Credit dynamics also moved in a positive direction. Loans to households grew from 2.6 percent to 2.8 percent, indicating that households may be feeling more secure in taking on new financial commitments, possibly supported by lower borrowing costs or improved labour market conditions. Lending to non-financial corporations remained stable at 2.9 percent, showing that firms are neither rapidly expanding nor contracting their borrowing, a pattern consistent with a wait-and-see approach during periods of moderate economic uncertainty.
Overall, the data point to a monetary landscape that is not overheating but is gradually strengthening, with household credit emerging as the clearest source of momentum. This latest update takes the RPI to minus 23 and the RPI-P to minus 27, meaning that economic activities continue to fall short of expectations in the euro area.
Market Consensus Before Announcement
Money growth not setting the world on fire, expected at 2.8 percent versus 3.0 percent in September.
Definition
M3 is the European Central Bank's (ECB) preferred broad measure of money supply. Since January 1999, the ECB has tended to focus on the 3-month moving average of the annual growth rate to judge underlying M3 trends although the significance of its 4.5 percent reference rate has been downgraded with time. The private sector lending counterpart is usually seen as the most important element of the M3 report.
Description
While other central banks have virtually ignored money supply data, the European Central Bank has not. Thanks to the influence of the Bundesbank in organizing the ECB, M3 money supply was established as one of the 'two pillars' of monetary policy used by the ECB, the other being the harmonized index of consumer prices (HICP). While the target for HICP is two percent, the seemingly largely ignored reference target for M3 growth is 4.5 percent as measured by a three month moving average which is compared with the same three months a year earlier.
M3 measures overall money supply. It consists of M1 which is currency in circulation plus overnight deposits and M2 which include deposits with an agreed maturity up to two years plus deposits redeemable at up to three months' notice. Not all M3 measures are alike. For example, ECB M3 is approximately equivalent to the Federal Reserve's M2 measure. Because an increase in M3 leads to price inflation, this figure can also be indicative of the likelihood of future interest rate hikes.