Eurozone on the ROCKS: Inflation PLUNGES further as ECB scrambles to save EU economy

Tuesday, July 18, 2017
By Paul Martin

EUROZONE inflation remains below target in an embarrassing development for the European Central Bank (ECB) which has pulled out all of the stops to kick the EU’s economy into action.

Tue, Jul 18, 2017

Despite desperate efforts by policymakers to raise inflation, it came in at just 1.3 per cent in June, the European Commission this week confirmed.

The ECB has slashed interest rates below zero and injects billions into the eurozone every month in the hope of lifting the economy.

Yet inflation continues to disappoint, with stagnant prices taken as a sign of weak consumer demand.

ECB chief Mario Draghi could once again be forced to defend his policies during an update later this week.

German politicians have been among the harshest critics of the top monetary policymaker and called for an end to the extreme policies that are hurting savers.

However, Mr Draghi has stuck with the controversial measures.

And the ECB president has continued to point to low inflation as a major barrier to removing support for the economy – even though economy growth has picked up in recent months.

It comes after monetary policymakers recently revised inflation forecasts for the eurozone down.

The euro bank’s current money-printing programme is set to come to an end in December and markets are now trying to guess the ECB’s next steps.

And traders are set to hang on to Mr Draghi’s every word when he talks on Thursday.

The euro has strengthened amid expectations that the programme could wind down.

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