LONDON, June 29 (UPI) -- New money supply figures from the European Central Bank have strengthened the hand of inflation hawks who oppose cutting interest rates.
The ECB's closely watched M3 data, covering cash, bank accounts and money market funds, rose at an annual 7.3 percent this month, up from 6.8 percent in May, the Telegraph reported Wednesday.
The figures, released Tuesday, suggest the eurozone is succumbing to "stagflation," a term that describes a combination of inflation and a stagnant economy, such as plagued the United States in the 1970s.
That, in turn, dims prospects that the ECB will cut interest rates as a quick fix to the slumping economies of Germany, Italy or the Netherlands.
The new money supply figures also vindicate the Bank of International Settlements, which this week blasted the world's central banks for their reliance on cheap money, and China for refusing to let its currency rise against the dollar.
