Eurozone inflation stuck below zero for second month

Annual inflation in the eurozone remained stuck below zero for a second consecutive month in May, although the prices of goods and services declined less than before, new data released on Tuesday showed.

Consumer prices inched up to minus 0.1 per cent from minus 0.2 per cent in April, the EU statistics agency Eurostat said in a preliminary estimate.

This comes despite efforts by the European Central Bank (ECB) to boost consumer prices and push the inflation rate back up to its annual target of just below 2 per cent.

ECB chief Mario Draghi has kept the door open to a new round of monetary stimulus to help boost inflation and economic growth.

Fears of deflation have dogged the eurozone, but European officials have argued that the negative rates seen so far have not been driven by an across-the-board drop in price levels, but rather external factors such as oil prices.

The May drop continued to be driven by energy prices, Eurostat said. They fell 8.1 per cent on the year, after dropping 8.7 per cent in April.

This was offset by gains in prices for food, alcohol and tobacco products, as well as for services and non-energy industrial goods.

Eurozone inflation had already slipped briefly into negative territory in February.

Last update: Fri, 24/06/2016 - 08:49

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