Brussels, Belgium (4E) – Inflation in the euro zone fell to 0.3 percent on an annual basis, compared with 0.4 percent in July, according to initial estimates from the European Union’s statistics agency Eurostat.
The easing in the figure, driven by a drop in tobacco, food, alcohol and energy prices, also moves annual inflation further away from the 2 percent inflation rate target by the European Central Bank, which could be prompted to take more aggressive measures to boost growth in the euro zone.
The decline in inflation comes at a time of weak growth in the common currency bloc. Second-quarter economy stagnated in the euro area, rising by an annual rate of just 0.2 percent. The jobless rate in July was 11.5 percent, which is unchanged from June, according to the Eurostat report.
Recent indicators suggest that the euro zone economy may struggle to grow much in the third quarter. Retail sales in Germany fell at their steepest monthly rate since July 2012, according to data released Friday. The result signals that consumer spending in the euro zone’s largest economy may not be enough to offset declining business outlook.