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Response to Tansy_Gold (Original post)

Mon Mar 17, 2014, 07:30 AM

17. EUROZONE INFLATION IN SURPRISE FALL TO 0.7 PERCENT

http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-03-17-07-01-13

LONDON (AP) -- Pressure on the European Central Bank to do more to prevent prices from falling in the 18-country eurozone ratcheted up Monday after figures showed inflation across the region unexpectedly fell in February to its lowest level since October.

Figures released Monday by the Eurostat statistics agency showed consumer prices were 0.7 percent higher in February than the year before. That was lower than the 0.8 percent initial estimate and took the annual rate down to the level it was in October, which was the lowest level since late 2009.

The figures are likely to reinforce concerns in the markets that the eurozone risks suffering a bout of deflation, or falling prices. Deflation can hurt an economy by encouraging consumers and businesses to delay spending in the hope of cheaper bargains further down the line.

The inflation rate, which is way below the level the ECB's target of just below 2 percent, also comes at a time when the euro has been buoyant in currency markets. A higher currency can pressure inflation downwards in two ways: It can make imports cheaper and weigh on economic activity by making exports more expensive on international markets.

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