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Friday 29 August 2014

Surprise fall in eurozone inflation

Published 17/03/2014 | 10:17

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Inflation across the 18-country eurozone has been revised down to its lowest level since October.

Inflation across the 18-country eurozone has been revised down to its lowest level since October, a development that may ratchet up the pressure on the European Central Bank to cut interest rates further.

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Figures released by the Eurostat statistics agency today show that consumer prices in the eurozone were 0.7% higher in February than the year before. That is lower than the 0.8% initial estimate and takes the annual rate down to the level it was in October.

The rate is also way below the level the ECB targets - it sets its policy to keep inflation just below 2%.

The unexpected drop in the inflation rate is likely to reinforce concerns in the markets that the eurozone may suffer a bout of deflation, or falling prices.

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