Eurozone Inflation Fall

Eurozone Inflation Fall.

Figures have shown that inflation in the Eurozone fell in December to 0.8% from 0.9% in November. November saw the European Central Bank (ECB) cut its base rate to a record low of 0.25%.

This latest batch of data shows that Europe now faces a period of deflation. This will cause consumers to wait for purchases expecting prices to fall further. The ECB will be meeting later this week, however there are expected to be no changes to this.

The ECB have said that there are no signs of deflation or any need for a further rate cut. However it is important that the base rate does not get stuck below 1%.

There are worries that due to high unemployment and no wage rises it may cause prices to go lower. Eurostat estimate is saying that the inflation rate is moving away for the ECB target of just under 2%.