Eurozone inflation remained subdued in August, figures released on Wednesday by the European Union’s statistics office showed. That marks a downward revision to Eurostat’s flash estimate of 0.2% and pushes annual inflation further away from the ECB’s target of just below 2%.
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Greek banks have relied on the emergency liquidity assistance (ELA), which they receive from the Greek central bank, since February after being cut off from the ECB’s funding window due to stalled bailout talks between the Greek government and its lenders.
EUR/USD hit lows of 1.1231, down from around 1.1255 ahead of the data, while EUR/JPY was at 135.21, down 0.38% for the day.
House prices fell sharply across the euro zone in 2009, then dipped again in 2012 and 2013, unwinding imbalances that built up before the financial crisis and putting the current recovery on a more solid footing, the European Central Bank said in an economic bulletin. Economists at J.P. Morgan Chase said inflation could fall to zero in the eurozone this month.
On a month-on-month basis, consumer prices were flat compared with the 0.6% drop registered in July and in line with analysts’ expectations.
Typically, low inflation is good for households and companies by boosting disposable income and providing a stable environment to borrow, invest and spend. So we are very far from what the major central banks have done using these instruments.
There were more signs of easing inflationary pressure Wednesday, as Eurostat reported slowing growth in labor costs across the bloc.
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The largest increase in employment was registered in Portugal – by 1.3%, Greece – 1.2%, as well as Ireland and Spain – by 0.9% each.
