Eurozone Deflation

Data this week showed euro inflation turned positive in May and the closely-watched core rate jumped to 0.9 per cent, signalling an end to the threat of deflation that has stalked the currency bloc and prompted the ECB to begin printing money.

The findings from a survey of economists taken this week are likely to disappoint the ECB, especially just after it announced, after much debate, a quantitative easing programme worth 60 billion euros a month starting in March.

Plunging energy costs have caused consumer prices in the Eurozone to fall annually for the first time since 2009, official figures showed Wednesday, in a development that's likely to reinforce market expectations that the European Central Bank (ECB) will soon provide an aggressive monetary stimulus.

At just 0.3 per cent in November, eurozone inflation is alarmingly low and could even fall further as a result of falling oil prices.

The European Central Bank left its benchmark interest rate unchanged at a record low on Thursday, holding off on more stimulus despite weak economic growth and low inflation.

Inflation in the 18-country eurozone fell to 0.7 per cent in the year to January from 0.8 per cent the previous month. The consensus in the markets was for a modest rise to 0.9 per cent.

German and French officials lowered expectations Wednesday for a deal to save the euro at this week's European summit, deflating investors' hopes for an imminent resolution to Europe's debt crisis.

Data this week showed euro inflation turned positive in May and the closely-watched core rate jumped to 0.9 per cent, signalling an end to the threat of deflation that has stalked the currency bloc and prompted the ECB to begin printing money.

The findings from a survey of economists taken this week are likely to disappoint the ECB, especially just after it announced, after much debate, a quantitative easing programme worth 60 billion euros a month starting in March.

Plunging energy costs have caused consumer prices in the Eurozone to fall annually for the first time since 2009, official figures showed Wednesday, in a development that's likely to reinforce market expectations that the European Central Bank (ECB) will soon provide an aggressive monetary stimulus.

At just 0.3 per cent in November, eurozone inflation is alarmingly low and could even fall further as a result of falling oil prices.

The European Central Bank left its benchmark interest rate unchanged at a record low on Thursday, holding off on more stimulus despite weak economic growth and low inflation.

Inflation in the 18-country eurozone fell to 0.7 per cent in the year to January from 0.8 per cent the previous month. The consensus in the markets was for a modest rise to 0.9 per cent.

German and French officials lowered expectations Wednesday for a deal to save the euro at this week's European summit, deflating investors' hopes for an imminent resolution to Europe's debt crisis.