Eurozone Inflation Falls to 0.3%

The eurozone’s inflation rate fell to 0.3% in November, from 0.4% in October, suggesting that deflation remains a threat for the 18-nation bloc.

Eurostat, the European Union’s statistics agency, said that the rate was pulled down by lower energy prices.

The European Central Bank considers anything below 1% to be in its deflation “danger zone”.

The eurozone’s low inflation is blamed for undermining growth, which has prompted ECB stimulus measures.

A fear among policymakers is that if deflation takes hold, consumers and companies will delay purchases in the hope prices will fall further.

Consumer inflation has not been at the ECB’s target level of close to, but below 2% since the start of 2013 and has been falling since a 3% peak in late 2011.

Eurostat said energy prices fell 2.5% from October and by 1.1% on an annual basis. Core inflation, stripping out energy and food prices, was 0.7%, unchanged from October.

Earlier this week, Germany’s inflation reading fell to its lowest for nearly five years.

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