Eurozone Inflation Rises Above Expectations

The eurozone inflation rate held steady at 0.4% in August, slightly higher than the original estimate of 0.3%, revised Eurostat figures show.

The revision means that the rate was unchanged from July’s 0.4%.

However, it is still much lower than August 2013’s figure of 1.3%.

Earlier this month, the European Central Bank (ECB), which has an inflation target of 2%, cut its benchmark interest rate to 0.05% and introduced new stimulus measures.

Under its asset purchase programme, it will buy debt products from banks, in an effort to add liquidity to the financial system and revive lending.

Fears are growing that the eurozone could tip into deflation, which would make it harder to restore the region’s moribund economy to health.

Mario Draghi, head of the ECB, has previously described inflation at below 1% to be in a “danger zone”.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza