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Price falls slow as inflation forecast to return to Eurozone by year's end

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Price falls slow as inflation forecast to return to Eurozone by year's end

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Eurostat’s latest snapshot of the Eurozone economy says prices are falling slower than previous months but the zone remains in negative inflation territory.

Inflation is now at a measured – 0.1% meaning prices have fallen
by 1% since January, but the slowing means fears of deflation are receding.

Unemployment, at 11.2%, has also fallen to its lowest level since May 2012.

Energy and food prices have been dragging the figures down as both are unusually cheap at the moment, but analysts say the signs are for inflation to return in the second half of the year as the Eurozone’s economies expand.

The ECB’s huge cash injection which began this month is also expected to weaken the euro further by the end of the year and in 2016, fuelling inflation.