Euro zone June inflation unchanged at low levels as expected

BRUSSELS Thu Jul 17, 2014 5:23am EDT

European Central Bank (ECB) President Mario Draghi speaks during the bank's monthly news conference in Frankfurt July 3, 2014. REUTERS/Ralph Orlowski

European Central Bank (ECB) President Mario Draghi speaks during the bank's monthly news conference in Frankfurt July 3, 2014.

Credit: Reuters/Ralph Orlowski

BRUSSELS (Reuters) - Euro zone inflation stayed low as expected in what the European Central Bank calls the "danger zone" in June as falling prices of food and phone calls offset more expensive tobacco and restaurants, data showed on Thursday.

Consumer prices in the 18 countries using the euro rose 0.1 percent on the month in June for a 0.5 percent year-on-year gain -- the same annual inflation rate as in May, data from the European Union's statistics office Eurostat showed.

The annual rate is well below the ECB's inflation target of close to, but below 2 percent. The central bank believes that price growth slower than 1 percent is a "danger zone" because of the risk of deflation. Price growth has been below 1 percent since last in October.

The ECB left interest rates unchanged in July, a month after cutting them to record lows and pushing the deposit rate into negative territory and it made clear it was ready to print money in the future if needed to prevent deflation.

Consumer prices fell in Greece, Portugal and Slovakia in June and 5 countries had inflation at or above 1 percent, including Germany where prices rose 1.0 percent on the year.

Core annual inflation - which excludes the volatile prices of energy and unprocessed food - stood at 0.8 percent in June, unchanged from May.

The ECB is also keeping an eye on the euro exchange rate and its impact on inflation -- the bank is ready to launch additional measures to prevent deflation if the euro becomes to strong.

(Reporting by Martin Santa)

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Comments (1)
Well that’s far for truth! In Greece deflation currently has risen (and so the debt value for Greeks) which is even higher than before Crisis Levels!

Here’s articles even from Reuters that contradict ECB appropriateness of policies!
“Greek deflation accelerates in May”
http://www.reuters.com/article/2014/06/10/greece-inflation-idUSEMN1O3SPZ20140610
“Greek deflation pace steady at 1.3 pct y/y in April”
http://www.reuters.com/article/2014/05/09/greece-inflation-idUSEMS1I5HGF20140509

ONE CANNOT FIT ALL! Greeks should have gone to Drachmas, and inflate their debt! Now they are virtually destroyed, with an Economy with 6 consecutive recessions, shrink GDP of about 27%, 28% unemployment, Higher Debt / GDP ratios, reduced salaries, political corruption of “Ouganda” levels

And worse of all THE ENTIRE EUROPE AND US Supports this Government for signing the “National Betrayal” PSI 2, under the technocratic non elected Government of Papadimos! Its like a “pact” that “if you sign this piece of Trash, we will keep you in power for ever, no matter what you do”.

Corruption, Corruption, Corruption. EU is done for!

Jul 21, 2014 7:47am EDT  --  Report as abuse
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