Eurozone Inflation Revised Down to Near 3-Year Lows

Eurozone Inflation Revised Down to Near 3-Year Lows

Inflation in the 19-country eurozone has fallen to its lowest rate since November 2016.

BRUSSELS — Inflation in the 19-country eurozone was revised down in September to its lowest rate in nearly three years as energy prices fell by more than initially thought, official figures showed Wednesday.

In an update, statistics agency Eurostat found that consumer prices rose by an annual rate of 0.8%, down from the previous prediction of 0.9%.

The fall in the rate from the previous month’s 1% is one of the major reasons why the European Central Bank announced another stimulus package last month.

While the headline rate was revised down, the core rate, which strips out volatile items such as food and energy, held steady at a still-low 1%.

Low inflation can be a sign of economic weakness and has been a concern for officials at the ECB, whose goal is to have inflation of just under 2%.

The central bank decided Sept. 12 cut a key interest rate cut and unveiled a new program of bond purchases that are aimed at raising inflation and supporting the wider economy, which has weakened for several reasons, including a slowdown in the global economy and uncertainty related to Britain’s departure from the European Union.

Several ECB council members have publicly expressed disagreement with the extent of the stimulus package backed by President Mario Draghi. They included Klaas Knot from the Netherlands and Jens Weidmann of Germany.

Sabine Lautenschlaeger, a German official on the top six-member executive board that runs the bank day to day, voiced opposition to bond purchases ahead of the meeting and resigned afterward — more than two years before the end of her term. She did not publicly state a reason.

Share:
error: Content is protected !!