Lending to the private sector in the euro zone contracted further in October, data released by the European Central Bank (ECB) on Thursday showed.

The credit to the private sector contracted by 2.1 percent in October after shrinking by 2.0 percent in September, according to the data. Meanwhile the annual growth rate of the broad monetary aggregate M3 decreased to 1.4 percent in October 2013, from 2.0 percent in September 2013.

The annual growth rate of the narrow money M1 stood at 6.6 percent in October, only slightly lower than 6.7 percent registered in September. Holger Schmieding, chief economist at Berenberg Bank, argued that real M1, as a good leading indicator for the real economy three quarters later, has been expanding rapidly since mid-2012 already and heralded the upswing which commenced in the second quarter this year.

Earlier this month, the ECB cut the benchmark interest rate to an all-time low of 0.25 percent out of concern of low inflationary expectations in the euro zone. The inflation unexpectedly fell to 0.7 percent in October in the euro area. Endi

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