“(ECB President) Mario Draghi opened the door wide at the September policy meeting to the European Central Bank expanding its QE, should euro zone consumer price inflation dip anew or even fail to pick up significantly over the coming months”, Archer said.
The set of data shows the European Central Bank (ECB) is still some way from hitting its two per cent target, which it has undershot for several years. “Risks to both euro area activity and inflation are on the downside, and these risks have intensified” in the past few weeks, Peter Praet, a member of the ECB’s Executive Board, warned last week. Inflation in all the euro-denominated 19 countries is subdued. Economists at J.P. Morgan Chase said inflation could fall to zero in the eurozone this month.
A STEEP drop in energy prices held down prices in the Eurozone in August, according to figures released yesterday by Eurostat, with officials dropping further hints that stimulus measures could be beefed up if necessary.
ECB may also facilitate banks in lending to companies and households. For these reasons, major central banks consider 2% inflation as optimal to provide a cushion against deflation.
The governing council of European Central Bank is showing its concerns on the slowdown in foreign trade as it’s impacting the exports.
“With contributions to euro area house price growth from Germany and Austria remaining solidly positive, the upturn in the annual growth rate since early 2013 essentially reflects a gradual easing of the negative contributions from the countries most affected by the financial crisis”, said the report. Gross wages rose 1.9 per cent, while non-wage costs were up 0.4 per cent over this period.
“Unemployment remains high and underlying domestic price pressures are weak”, the OECD said in its Interim Economic Outlook.