News

Inflation at 5-Year Low in European Union

In September, core inflation in the eurozone slowed to a 5-year low of 0.7%.

The fear of deflation looms large. European Central Bank President Mario Draghi recently said that he is "fully determined" to do what it takes to support a higher inflation rate.

However, an economist at a German financial firm says "It's looking bleak right now, and I don't see any short-term relief."

Read this excerpt from a September 30 Bloomberg article:

Euro-area inflation slowed in September to the lowest level in five years, challenging European Central Bank officials gathering this week to decide whether more measures are needed to avert deflation. ...

Low inflation "is a sign of incredible weakness of economic activity in the euro zone," said Christopher Matthies, an economist at Sparkasse Suedholstein in Neumuenster, Germany. ...

Euro-area economic confidence slipped this month to the lowest level since November, while manufacturing and services growth unexpectedly slowed to the weakest pace this year ... .

In addition to cutting interest rates to record lows and offering long-term loans to banks, the ECB has committed to buy asset-backed securities and covered bonds to steer price gains back toward its goal of just under 2 percent.

You can access the entire article via the link below:

http://www.bloomberg.com/news/2014-09-30/euro-region-inflation-slows-as-ecb-prepares-for-policy-meeting.html