Eurozone inflation revised up to still-low 0.4

(MENAFN- AFP) Eurozone inflation stood at 0.4 percent in August, official data showed on Wednesday, slightly higher than an original estimate which had pushed the European Central Bank to open up the cash floodgates.

With the adjustment from 0.3 percent, inflation in August remained unchanged from the July level, but still much lower than 1.3 percent a year ago and way off the ECB's target of just under 2.0 percent.

The latest twist downwards, against a background of worryingly sluggish eurozone growth, was driven by falls in the prices of food and energy, the European Union's statistical arm Eurostat said.

The figures increase evidence that the eurozone is flirting with deflation, a climate of falling prices which can cause businesses and consumers to delay purchases, further reducing demand and prices and pushing up unemployment, a spiral which central banks find extremely difficult to counter.

The ECB, which met a week after Eurostat released the first estimate on August 29, took major action to fight the threat of deflation, lowering interest rates to record low levels and launching a new monetary stimulus programme.