EU Inflation Slows to Five Year Low

Eurozone inflation slipped again in September, with prices rising at their slowest rate in nearly five years.

Consumer price inflation rose by just 0.3% compared to the same month last year, slowing from August’s 0.4% rise, said EU statistics agency Eurostat.

It is the lowest level for eurozone inflation since October 2009, adding to fears of a deflationary spiral.

Inflation has been persistently below the European Central Bank’s (ECB) 2% target rate.

Eurostat said falls in the prices of unprocessed food and energy had driven the overall slowdown.

Unprocessed food prices fell 0.9% year-on-year, while energy dropped 2.4%.

Earlier this month, the European Central Bank cut its benchmark interest rate to 0.05%, and introduced new stimulus measures in an attempt to kick-start the eurozone economy.

However, the dramatic move fell short of a programme of buying government bonds – a process known as quantitative easing (QE), and one which the US Federal Reserve has undertaken.

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