Finance Markets reports:
Eurostat has revealed that the CPI in the euro zone declined in August by an annual rate of 0.2% and followed the record 0.7% fall in July.
Analysts were encouraged by the slower rate of decline in consumer prices and Nick Kounis of Fortis commented: “We think that the negative impact of energy prices is starting to unwind. This process has much further to go and it is likely to push inflation back into positive territory in the final months of this year.”
“The report supports the ECB in its view that the recent period of negative annual inflation rates will prove to be a short-lived phenomenon that has no implications for monetary policy,” added Mr Kounis.
Lower energy and food prices have driven inflation down but a risk of deflation is highly unlikely according to many analysts.