The eurozone's 'Goldilocks' recovery – not too hot, not too cold – extended into April, with economic confidence strong, mortgage lending slowing and inflation falling, according to latest data.

The flurry of economic news is likely to harden expectations that the European Central Bank will increase its main interest rate by another quarter percentage point in June. The statistics suggested that activity remained robust, in spite of the euro rising to a fresh peak against the dollar, with few signs yet of inflation accelerating.

Inflation fell to 1.8 per cent in April, from 1.9 per cent in March and remains within the ECB's target of an annual rate "below but close" to 2 per cent.

The central bank fears economic growth will create longer-term inflation pressures. Adding to its concern will be data for M3, the broad money supply, showing annual growth accelerating to 10.9 per cent in March, from 10.0 per cent in February – setting another record since the launch of the euro in 1999.

Officially the ECB, which regards such monetary data as a useful inflation early warning system, still sees a M3 growth rate of 4.5 per cent as consistent with medium-term price stability.

However, the ECB accepts that recent figures may have been distorted. "The biggest reason why M3 is surging is because of inflows into the euro area," said Julian Callow, economist at Barclays Capital. "As the ECB has continued to push up interest rates, more capital is being lured into the euro area."

At the same time, eurozone lending for house purchases slowed further in March, with the annual growth rate falling to 8.9 per cent from 9.4 per cent in February.

Overall, economic optimism remains high in the eurozone. The European Commission reported that its "economic sentiment" indicator dipped to 111.0 in April, from 111.1 but that remained close to the six-month high reported last time.

Nevertheless, German consumers still show few signs of reacting to the country's economic turnaround. German retail sales in March were 0.7 per cent lower than in the preceding month.