Reaching danger zone: ECB concerned over deflation threat
Annual inflation in the euro zone cools to 0.3% in November compared to 0.4% in October
LONDON:
Annual inflation in the euro zone cooled to 0.3% in November – compared to 0.4% in October – as energy prices fell, suggesting deflation remains a real threat for the European Central Bank (ECB). The reading marked a return to September’s five-year low for consumer inflation and was in line with a poll forecast. German data this week showed inflation in the biggest euro zone economy at its lowest in nearly five years. Consumer inflation has not been at the ECB’s target level of close to 2% since the start of 2013 and has been falling since late 2011 when it peaked at 3%. The ECB considers anything below 1% to be in its “danger zone” and the bank may be forced to take more radical steps to prevent deflation – a concern for the bloc because that would make its debts harder to bring down.
Published in The Express Tribune, November 30th, 2014.
Annual inflation in the euro zone cooled to 0.3% in November – compared to 0.4% in October – as energy prices fell, suggesting deflation remains a real threat for the European Central Bank (ECB). The reading marked a return to September’s five-year low for consumer inflation and was in line with a poll forecast. German data this week showed inflation in the biggest euro zone economy at its lowest in nearly five years. Consumer inflation has not been at the ECB’s target level of close to 2% since the start of 2013 and has been falling since late 2011 when it peaked at 3%. The ECB considers anything below 1% to be in its “danger zone” and the bank may be forced to take more radical steps to prevent deflation – a concern for the bloc because that would make its debts harder to bring down.
Published in The Express Tribune, November 30th, 2014.