Eurozone slides further into deflation as prices fall 0.6%
|
Version 0 of 1. Eurozone prices fell 0.6 per cent in January, as a weak economy and sliding oil prices took their toll. Consumer prices were down 0.6 per cent compared to a year ago, accelerating the 0.2 per cent annual drop from December, when the eurozone entered deflation territory for the first time since the global financial crisis Friday's report by the Eurostat statistics agency showed that the core inflation rate, which strips out volatile food and energy prices, was plus 0.5 per cent, down from 0.7 per cent the month before. The European Central Bank is preparing a €1.1 trillion (£827 million) QE boost for the eurozone. President Mario Draghi said earlier this month that the ECB would purchase €60bn of eurozone sovereign bonds and other safe financial assets, every month between March and September 2016, or until inflation is back up to the central bank’s official 2 per cent target. Meanwhile, jobless figures showed a slight improvement in December, with the unemployment rate falling to 11.4 per cent from 11.5 per cent the month before. The number of unemployed people fell by 157,000 in the eurozone. The figures showed a wide diversity between countries. Germany, the eurozone's biggest economy, had a jobless rate of only 4.8 per cent. Greece, still recovering from a crisis over too much government debt, had the highest at 25.8 per cent. Spain, working off a debt crisis that involved a real estate boom and bust, had a jobless rate of 23.7 per cent. Greece's new government has rejected the budget austerity course forced on the country as a condition of getting international bailout loans. But creditor countries led by Germany are insisting that it stick with its promises to restrain government spending and public jobs. Additional reporting by Associated Press |