Inflation in the eurozone fell to 0.3 percent in September, the lowest for nearly five years, official figures showed Tuesday, signalling that the European Central Bank may have to go even further to avert the threat of deflation.
Eurozone unemployment remained steady at a near-record 11.5 percent in August, unchanged from July, the EU’s data agency Eurostat also reported, amid a stagnating economy and uncertainty over the crisis with Russia.
“September’s fall in euro-zone inflation to a whisker above zero and August’s weak labour market data will add to the pressure on the ECB in the run-up to its meeting this Thursday,” said Jennifer McKeown, Senior European Economist at Capital Econics in London.
Inflation has become a central problem for the eurozone economy, with sluggish demand from households and businesses keeping prices low and raising fears that the already sluggish economy could slip back into recession.
September’s inflation figure fell from 0.4 percent in August and was the lowest since October 2009, at the height of the global financial crisis.
The data largely reflected what emerged on Monday, when powerhouse Germany showed inflation remained stuck at the ultra-low level of 0.8 percent for the third month in a row in September.
In Belgium, prices decreased by 0.12 percent in September, the first time they have fallen since November 2009. In Spain, the fourth-largest economy in the eurozone, consumer prices fell for the third month in a row this month, down 0.3 percent on a yearly basis.
Unemployment in the 18-nation single currency bloc remained at 11.5 percent in August, the same level as July and down from 12.0 percent a year earlier.
The jobless picture in different member countries varied widely, however.
A very high level of unemployment in Spain fell in the period, from 26.2 a year ago to a still alarmingly big 24.1 percent in August.
France, an increasing source of concern in the eurozone, saw unemployment rise from 10.2 percent to 10.5 percent in 12-months.
Germany, the economic engine in the eurozone, posted a low 4.9 percent for August.