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Eurozone inflation at 15-month low

Eurozone inflation at 15-month low
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With the recession biting, demand for products is falling and inflation in the eurozone fell to it lowest in 15 months in May.

Consumer price inflation in the 17 countries sharing the euro fell to 2.4 percent year-on-year. In April it had been 2.6 percent.

Economists said that gives the European Central Bank more room to lower interest rates to stimulate growth.

The ECB meets next Thursday for its June interest rate decision and a majority of economists predict a rate freeze until the end of 2013, although a growing minority see a rate cut before the end of this year.

The feeling among economists is that inflation will fall further, with slowdowns in China and India reducing pressure on commodities, notably oil and food. A possible eurozone recession would make passing on price increases ever harder.

Inflation in Germany and Spain fell below two percent this month and in Belgium slipped below three percent for the first time in a year and a half.