Annual inflation in the eurozone turned negative in September due to sharply lower energy prices, the EU’s statistics office confirmed yesterday, maintaining pressure on the ECB to increase its asset purchases to boost prices.

Eurostat said consumer prices in the 19 countries sharing the euro fell by 0.1% in the year to September, dipping below zero for the first time since March, and confirming its earlier estimate. Prices were 0.2% higher in September than in August.

Eurostat said milk, cheese and eggs were cheaper, while heating oil and motor fuel stripped almost a full percentage point from the annual rate.

Restaurants and cafes, vegetables and tobacco had the biggest upward impact.

Excluding the most volatile components of unprocessed food and energy — what the ECB calls core inflation — prices were 0.8% up year-on-year, slightly down from the previous reading of 0.9%. Month-on-month, they rose 0.4%.

Long-term inflation expectations have dropped to their lowest since February, before the ECB’s asset purchases started, as China’s economic slowdown, the commodity rout and paltry eurozone lending growth reinforce pessimistic predictions.

Under its quantitative easing scheme, the ECB is buying government bonds and other assets to pump around €1tn into the economy, aiming to lift inflation towards its target rate of just under 2%.

Reuters


Lifestyle

Keep chomping on those carrots so your eyes will be in perfect working order for that prolonged annual gaze through the keyhole as Home of the Year returns for a sixth series next week.Home of the Year offers a good excuse for a bit of good-natured interiors voyeurism

They differ from the more prevalent oranges we eat because their flesh, and often the skin, is crimson or deep red in colour.Michelle Darmody: The best time of year to buy blood oranges

The annual Members Exhibition now underway at the Lavit Gallery in Cork features 92 works from 72 artists.The exhibition runs until March 7.Under the hammer: Your guide to upcoming auctions

There’s an oriental theme at the James Adam ‘At Home’ auction in Dublin, says Des O’SullivanAuctions: Sale full of eastern promise

More From The Irish Examiner