Euro inflation to hit 0.5 percent in June
(MENAFN) Eurozone inflation is still at its lowest since the financial crisis, data showed yesterday, highlighting the threat of deflation but analysts say that the ECB is unlikely to ease policy further this week, The Peninsula Qatar reporte
Deflation is such a threat that the European Central Bank has moved into negative interest rates to get cash flowing, and authorities are closely watching inflation rates in the hope that it will edge up towards the bank's targe
But the European Union's statistics office Eurostat said in a first estimate that inflation across the 18-nation eurozone was 0.5 percent in June - the same level as in May. This means that inflation is at the lowest level since the financial crisis of 2008-2009 nearly froze the market on which banks lend to each other and caused recession in several advanced economie
ECB data released yesterday also showed that loans to the private sector in the eurozone fell by 2 percent in May, even faster than the 1.8-percent drop the previous month. "June's weak eurozone inflation figure will add to pressure on the ECB to provide more policy support, particularly given recent signs that the recovery may already be slowing," said Capital Economics senior economist Jennifer McKeown
Deflation is such a threat that the European Central Bank has moved into negative interest rates to get cash flowing, and authorities are closely watching inflation rates in the hope that it will edge up towards the bank's targe
But the European Union's statistics office Eurostat said in a first estimate that inflation across the 18-nation eurozone was 0.5 percent in June - the same level as in May. This means that inflation is at the lowest level since the financial crisis of 2008-2009 nearly froze the market on which banks lend to each other and caused recession in several advanced economie
ECB data released yesterday also showed that loans to the private sector in the eurozone fell by 2 percent in May, even faster than the 1.8-percent drop the previous month. "June's weak eurozone inflation figure will add to pressure on the ECB to provide more policy support, particularly given recent signs that the recovery may already be slowing," said Capital Economics senior economist Jennifer McKeown
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