If there was ever an irrefutable reason for the ECB to keep monetary policy in an over-easy state, it would be summed up in three words – muted core inflation. Even the price obsessed Bundesbank hawks should take notice. Fiscal austerity, debt deflation and recession are having a very marked impact on Eurozone dis-inflation. It is a reflection of the very weak state of the Eurozone economy. There is every reason now why the ECB should cut rates again soon. Recession is becoming more embedded and monetary stimulus is not getting through to faster demand. Rates need to come down and stay low for a very long while to help boost recovery. Patience will be a virtue here as it will take a long while for the Eurozone to break out of recession, possibly not even until 2014.
Highlights:
Headline inflation steady at 2% in January
Core inflation eases to 1.3% from 1.5%
Highlights:
Headline inflation steady at 2% in January
Core inflation eases to 1.3% from 1.5%
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