Deflation ‘avoided in the eurozone’

European Central Bank policymaker Christian Noyer said over the weekend that it seemed that the risk of deflation had been avoided in the eurozone, even if inflation remained too low.

The eurozone inflation rate held at a rate of 0.5% last month, well below the ECB’s target of close to, but below, 2% and within what ECB president Mario Draghi has called the “danger zone”.

Mr Noyer said it was a paradox that inflation remained weak despite very accommodative monetary polices, adding: “Even if the risk of deflation seems to have been avoided, we have . . . price increases that are too low.”