Eurozone consumer prices at record-equalling low

Eurozone consumer prices fell at a record-equalling pace in January, more steeply than expected and appearing to vindicate the European Central Bank’s money-printing plan to combat sustained deflation.

The European statistics office said in a first estimate yesterday prices in the 19 countries using the single currency in January were 0.6% lower than a year earlier, after a 0.2% decline in December. The figure was below expectations for a decline to minus 0.5%.

The eurozone has only endured negative inflation rates in one other period, from June to October 2009. The 0.6% decline, this month, matched the lowest figure during that period, in July 2009. Sharply reduced fuel costs explained the drop.