The Eurozone’s Consumer Price Index fell to its lowest inflation level in four years in February. Revised data put inflation at 0.7% per annum, helped by cheaper fuel, heating oil, and telecoms.
It is now at the level which triggered the ECB’s cutting interest rates to a record low of one quarter of a percent in November. The ECB says it is studying policies to ward off possible deflation.
President Mario Draghi says the risks of this are “quite limited”, but warned that the longer inflation stays low, the higher the probability is of deflationary risks emerging.