Euro zone lending growth levels off, keeps ECB on toes

Lending to companies grew by 1.9 percent year-on-year in September while household loans rose by 1.8 percent, keeping the steady but slow pace seen since the start of the summer

With the euro zone recovery remaining timid and plenty of risks at its doorstep, such as Britain's negotiations to leave the European Union, the ECB is nearly certain to continue buying bonds beyond its March target, sources have told Reuters.

Hoping to revive borrowing, spending and investment, the ECB has offered stimulus for years, cutting rates deep into negative territory, providing ultra cheap loans to banks and buying bonds worth over a trillion euros.

A key forward-looking indicator also counseled caution.

The annual growth rate of the M3 measure of money circulating in the euro zone, which has in the past predicted economic activity, slowed to 5 percent, compared to economist expectations and an August reading of 5.1 percent.

M3 has been hovering around its current level since April 2015.

An ECB survey showed last week euro zone banks are set to tighten access to corporate credit for the first time in two and a half years as they become more wary of risk and negative interest rates eat into their profit.

(Reporting by Francesco Canepa; Editing by Balazs Koranyi/Jeremy Gaunt)