Eurozone inflation slips to lowest level since 2009 in Jan
According to media reports, the drop in eurozone inflation has primarily resulted from lower energy prices, which declined by 8.9% in January after falling by 6.3% in December. The data also showed that the unemployment rate in the eurozone remained in double digits in December. The unemployment rate was reported at 11.4% in December, slightly below economists’ initial estimates, which called for a rate of 11.5%.
Some analysts commented that negative annual inflation as well as unfavorable employment data raise the possibility of deflation for the region while the others argued that the fall in prices is a temporary situation stemming from declining crude oil prices.
On January 22, the European Central Bank (ECB) left its main refinancing interest rate unchanged at a record low of 0.05% for a third consecutive month. The ECB also kept its marginal lending rate and deposit facility rate steady at 0.03% at -0.2%, respectively. The ECB’s interest rate decision was in line with economists’ expectations.
Although the ECB kept its rates unchanged, the ECB is decided to begin a program of buying €1.1 trillion of government bonds and other debt in order to spur economic growth.
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