World Economy

Negative again: Euro zone inflation dips

European Central Bank feeling stimulus pressure
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European Central Bank feeling stimulus pressure

Inflation in the euro zone turned negative again in September, data on Wednesday showing, raising pressure on the Europe Central Bank to ramp up monetary stimulus.

The euro zone consumer price index (CPI) fell 0.1 percent in September from a year earlier, falling below zero for the first time since March – when the ECB launched its 1 trillion euro ($1.12 trillion) asset-purchase program to fuel inflation and growth.

The fall in the CPI compares with a rise of 0.1 percent in August and analyst expectations in a Reuters poll for a 0 percent reading.

Inflation remains well below the European Central Bank's target of close to but just below 2 percent.

And inflation expectations have fallen in recent months as oil prices fall and signs of a slowdown in China's economy grow.

Against this backdrop, talk of an extension to the ECB's asset-purchase program has grown in recent weeks.

Goldman Sachs said in a note earlier this month that the ECB was likely to continue the program through the end of next year and only end it in mid-2017. It is currently scheduled to end in September 2016.

Separate data showed unemployment in the euro zone at 11 percent in August.

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