Eurozone inflation exits negative territory in October

AFP, BRUSSELS: Eurozone inflation rose to zero per cent and out of negative territory in October, official data showed yesterday, a level that is still low enough to encourage the European Central Bank to pump up its stimulus.
Earlier this month, ECB president Mario Draghi signalled that the central bank could be ready to boost its contested bond-buying programme given low inflation levels across the 19 countries that share the euro.
The EU's Eurostat statistics agency also said eurozone unemployment dropped to 10.8 per cent in September.
"Although today's inflation and unemployment data for the eurozone revealed small improvements, they are still very weak by past standards, suggesting that the ECB cannot afford to delay increasing its policy support much longer," said Jessica Hinds, European economist at Capital Economics.
In March, the ECB launched a more than one-trillion-euro stimulus plan running through to September next year in order to get inflation closer to its 2.0 per cent target.
Despite that, the ECB's chief economist this week told AFP that there is a growing risk that inflation in the eurozone will not
return to levels conducive to healthy economic growth opening the door to more central bank action.
"There are no taboos," Peter Praet said, on the measures needed to push inflation back to more suitable levels.
The exit from deflation came as the steep fall in energy prices, led by oil, slowed in October to 8.7 percent annually instead of 8.9 per cent the previous month, the data showed.
ING analyst Teunis Brosens said the inflation data made the "inflation anxieties" expressed by the ECB last week seem "odd".
"It is hard to escape the notion that inflation was merely an excuse to talk down the euro exchange rate last week," Brosens said, referring to the euro's strong trading against the US dollar that hurts Europe's exporters.

Eurozone inflation exits negative territory in October

AFP, BRUSSELS: Eurozone inflation rose to zero per cent and out of negative territory in October, official data showed yesterday, a level that is still low enough to encourage the European Central Bank to pump up its stimulus. Earlier this month, ECB president Mario Draghi signalled that the central bank could be ready to boost its contested bond-buying programme given low inflation levels across the 19 countries that share the euro. The EUs Eurostat statistics agency also said eurozone unemployment dropped to 10.8 per cent in September. Although todays inflation and unemployment data for the eurozone revealed small improvements, they are still very weak by past standards, suggesting that the ECB cannot afford to delay increasing its policy support much longer, said Jessica Hinds, European economist at Capital Economics. In March, the ECB launched a more than one-trillion-euro stimulus plan running through to September next year in order to get inflation closer to its 2.0 per cent target. Despite that, the ECBs chief economist this week told AFP that there is a growing risk that inflation in the eurozone will not return to levels conducive to healthy economic growth opening the door to more central bank action. There are no taboos, Peter Praet said, on the measures needed to push inflation back to more suitable levels. The exit from deflation came as the steep fall in energy prices, led by oil, slowed in October to 8.7 percent annually instead of 8.9 per cent the previous month, the data showed. ING analyst Teunis Brosens said the inflation data made the inflation anxieties expressed by the ECB last week seem odd. It is hard to escape the notion that inflation was merely an excuse to talk down the euro exchange rate last week, Brosens said, referring to the euros strong trading against the US dollar that hurts Europes exporters.