An image of the planned new headquarters of the European Central Bank in Frankfurt. ECB President Jean-Claude Trichet layed the foundation stone on May 19, 2010. The €850m headquarters will consist of two towers—one 41 floors high and the other 44 floors—joined by a massive conference and visitor centre where a historic fruit-and-vegetable market once stood. It will be completed in 2014. Trichet's eight-year term expires in October 2011.

Eurozone annual inflation is expected to be 1.6% in May 2010 according to a flash estimate issued by Eurostat, the statistics office of the European Union. It was 1.5% in April. In other news, the ECB (European Central Bank) said its M3 broad measure of money and credit supply in the common currency area, was unchanged in April.

Computation of flash estimates: Eurozone inflation is measured by the Monetary Union Index of Consumer Prices (MUICP). To compute the MUICP flash estimates, Eurostat uses early price information relating to the reference month from Member States for which data are available as well as early information about energy prices.

The flash estimation procedure for the MUICP combines historical information with partial information on price developments in the most recent months to give a total index for the Eurozone. No detailed breakdown is available. Experience has shown the procedure to be reliable (19 times exactly anticipating the inflation rate and 5 times differing by 0.1 over the last two years).

Money Supply

The ECB said today that the annual rate of change of M3 (money and credit in the Eurozone economy) stood at -0.1% in April 2010, unchanged from the previous month. The three-month average of the annual rates of change of M3 over the period February 2010 - April 2010 stood at -0.2%, unchanged from the previous period.

On the main components of M3, the annual rate of growth of M1 (cash) was 10.7% in April 2010, after 10.8% in March. The annual rate of change of short-term deposits other than overnight deposits decreased to -8.5% in April, from -8.0% in the previous month. The annual rate of change of marketable instruments increased to -9.2% in April, from -10.9% in March.

Turning to the main counterparts of M3 on the asset side of the consolidated balance sheet of the MFI (monetary financial institutions) sector, the annual growth rate of total credit granted to Eurozone residents stood at 1.8% in April 2010, unchanged from the previous month. The annual rate of growth of credit extended to general government decreased to 8.7% in April, from 9.8% in March, while the annual growth of credit extended to the private sector increased to 0.3% in April, from 0.1% in the previous month. Among the components of the latter, the annual rate of change of loans to the private sector increased to 0.1% in April, from -0.2% in the previous month (adjusted for loan sales and securitisation the annual growth rate of loans to the private sector increased to 0.1%, from -0.1% in the previous month).

The ECB said the annual rate of change of loans to nonfinancial corporations (private sector businesses) decreased to -2.6% in April, from -2.4% in March. The annual growth rate of loans to households increased to 2.5% in April, from 2.1% in the previous month. The annual rate of growth of lending for house purchase increased to 2.9% in April, from 2.6% in the previous month.

The annual rate of change of consumer credit increased to -0.3% in April, from -1.1% in March, while the annual growth rate of other lending to households increased to 3.0% in April, from 2.8% in the previous month. Finally, the annual rate of growth of loans to non-monetary financial intermediaries (except insurance corporations and pension funds) increased to 2.2% in April, from 0.1% in the previous month.

The Member States of the Eurozone are Belgium, Germany, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.