Eurozone housing market ‘turns corner’, says European Central Bank

Figures released Wednesday by the European Union’s statistics agency showed that the revision in consumer price inflation from the initial estimate of 0.2 percent was largely due to a sharp drop in energy prices reflecting weakness in the global price of oil.

The European Central Bank has already indicated that it is prepared to expand its bond-buying program beyond September 2016.

Although ELA is run through national central banks, the ECB’s full governing council can veto its use with a two- thirds majority. Such a move could become necessary if inflation weren’t return to the ECB’s medium-term target, as now envisaged by the bank. The lowest inflation rates were observed in Cyprus (-1.9%), Romania (-1.7%) and Lithuania (-1.0%), while the highest were observed in Malta (1.4%), Austria (0.9%) and Belgium (0.8%).

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.

“The total amount that we have purchased represents 5.3 per cent of the GDP of the euro area, whereas what the [US] Fed has done represents nearly 25 per cent of the US GDP, what the Bank of Japan has done represents 64 per cent of the Japanese GDP and what the United Kingdom has done is 21 per cent of the UK’s GDP”, he said in an interview with Thomson Reuters yesterday.

In a separate report Wednesday, Eurostat said growth in both labor costs and wages slowed in the second quarter.