FRANKFURT (Reuters) - Euro zone lending inched up to multi-year highs in December, fresh data showed, indicating that the European Central Bank's cheap cash is slowly making its way through the economy, if not fast enough for policy to be tightened soon.
Hoping to revive lending to fuel growth and inflation, the ECB has cut rates into negative territory, offered banks free loans and has bought 1.5 trillion euros' worth of assets, keeping borrowing costs at record lows.
Inflation in the euro zone jumped to 1.1 percent in December from 0.6 percent in November, and hawks have argued for reduced stimulus.
But ECB President Mario Draghi last week made clear that he was not convinced the inflation recovery is sustainable, so there has been no discussion yet about ending the bank's policy of easy money.
"It's good that banks are lending more to companies. But the whole thing is still fragile, because of the weak growth in Europe," said Dirk Gojny, an economist with National Bank in Essen.
"This will not make Mario Draghi deviate from his expansionary stance in the foreseeable future."
In December, bank loans to euro zone companies grew by 2.3 percent after a revised 2.1 percent increase one month earlier, the fastest pace since mid-2009, ECB data showed on Friday.
Household lending growth meanwhile accelerated to 2.0 percent last month from 1.9 percent in November, the fastest since mid-2011.
"This is clearly not that strong in absolute terms, but it continues to be a big improvement on the last couple of years," JPMorgan economist Greg Fuzesi said. "Lending trends are also positive in most countries."
The annual growth rate of the M3 measure of money circulating in the euro zone, which has in the past often predicted economic activity, rose to 5.0 percent last month from 4.8 percent in November, slightly beating forecasts of 4.9 percent.
(Reporting by Andreas Framke and Frank Siebelt; editing by Andrew Roche)