Inflation in the eurozone hits five-year low of 0.3%

Eurozone inflation dropped to a fresh five-year low in August, something likely to concern the European Central Bank but not force it into immediate policy action.

Consumer prices in the 18 countries using the euro rose by just 0.3%, year-on-year, in August, the smallest increase since October 2009, the EU’s statistics office Eurostat said yesterday. The number matched market expectations.

The ECB targets an inflation rate at below-but-close to 2% over the medium term, a level not seen since the first quarter of 2013. It also considers anything below 1%, over time, to be in a “danger zone”.