EU on the BRINK: Brussels leaders DESPERATE as inflation sinks further below ECB target

Saturday, July 1, 2017
By Paul Martin

THE European Central Bank has been dealt a heavy blow after inflation in June tumbled further below target, despite extreme measures from policymakers to stoke the economic measure.

Sat, Jul 1, 2017

Policymakers have slashed interest rates below zero and signed off a money-printing program that injects billions of eurozone every month.

Yet price growth across the bloc remained weak last month, coming in at just 1.3 per cent.

In a major setback, the ECB recently revised inflation forecasts for the eurozone down.

Low inflation can indicate weak consumer demand and an ailing economy.

Unless price rises are stronger, ECB chief Mario Draghi has signalled that he is unlikely to scale back the mammoth levels of support for the economy.

The top central banker has stuck by his cautious outlook for the bloc, despite recent signs of growth.

Markets had hoped that Mr Draghi may soon consider withdrawing some of the monetary measures.

It comes amid criticism from Germany that the policies are not working.

Chancellor Angela Merkel raised pressure on the bank, as she blasted that the euro is too weak.

Money-printing and low interest rates helps to devalue a currency.

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