Eurozone Inflation Slows As Estimated

Bruno Cirelli
Luglio 17, 2017

Prices grew at a faster pace also for industrial goods, excluding energy, with inflation slightly picking up to 0.4 percent on the year from 0.3 percent in May, although on a monthly basis prices fell by 0.4 percent. Analysts at Lloyds Bank expect the ECB will leave its policy rates unchanged and make no new announcements on its asset purchase programme.

Inflation in the euro area dipped in June amid widespread price declines outside of services.

The stubborn refusal of inflationary pressure to pick up towards the ECB's two per cent target, despite the continued fall in unemployment in the Eurozone, has made the central bank wary of raising tightening conditions either by stopping quantitative easing (QE) or raising its key interest rates. It is now buying around €60bn in bonds each month in an effort to push money out into the broader economy and stimulate growth, with more purchases at a slower rate expected by most economists.

Malta's 1 per cent rate put the country at the lower end of the European Union inflation table, with just eight member states registering a lower annual rate. The pair has been on a gradual uptrend since the beginning of the year.

In monthly terms, consumer prices in Latvia, just like in Croatia, rose by 0.4%.

Economists at JP Morgan believe the European Central Bank is "likely to signal a tapering decision in September", with the possibility of "an opening statement that removes the "easing bias" on QE or points to upcoming forecasts as a guide to assessing asset purchases beyond this year".

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