Faster growth in euro-zone borrowing has strengthened the case for the European Central Bank (ECB) to raise interest rates again in September.

The latest ECB data highlight the robustness of economic activity in the 13-country region and are likely to persuade the Frankfurt-based central bank that it must keep up the pace of monetary tightening. Earlier this month, the ECB raised its main interest rate by a quarter percentage point for the eighth time since December 2005, to 4 per cent.

"The conjunction of strong money growth, strong credit growth and strong asset prices is worrying European policymakers in a way that it is not worrying the US Federal Reserve," said Robert Barrie, economist at Credit Suisse.

The size and timing of the impact on inflation were hard to judge, "but there is no way that it is going to create lower inflation". The ECB might also worry about risks to financial stability.

Separately, better-than-expected German unemployment figures pointed to a tightening labour market in the eurozone's largest economy - raising fresh inflationary concerns.

The eurozone's economic turnaround became clear by the middle of last year, and 2006 saw the fastest growth in eurozone gross domestic product for six years. Industrial production data have pointed to some weakening in recent months but upbeat confidence indicators suggest a rebound is likely and institutions such as the International Monetary Fund are revising up this year's growth forecasts.

The ECB sees the eurozone as growing faster than its "potential" growth rate - a pace of expansion that does not generate excessive inflation. So far inflation remains within its target of an annual rate "below but close" to 2 per cent but the dip it expected has not materialised because oil prices have been higher than predicted in recent months. The ECB expects inflation to pick up in the second half of the year. A September interest rate rise would coincide with fresh ECB growth and inflation forecasts.

Consumer credit growth has weakened in recent months. But the ECB figures showed eurozone lending to business was expanding at an annual rate of 12.6 per cent in May, up from 12.2 per cent in April. That almost certainly reflected investment spending as well as merger and acquisition activity, including by private equity groups.