Euro zone inflation shows biggest monthly fall in January

BRUSSELS — Euro zone consumer prices fell in January at their fastest ever pace on a monthly basis, dragged down by a slump in the cost of non-energy industrial goods, keeping annual inflation well below the European Central Bank’s target. Inflation rate in the 18 countries in the European Union (EU) dropped by 1.1 percent in January when compared with December, keeping the annual inflation rate at 0.8 percent for a second month in a row, according to the EU’s statistics office Eurostat. The annual inflation rate was revised from 0.7 percent, which Eurostat released in a flash estimate on January 31. The annual rate was influenced by a 1.2 percent decline in the highly volatile prices of energy, while the monthly decline was hit by a 2.9 percent fall in prices of non-energy industrial goods and a 0.4 percent drop in the price of services. In January, euro zone members Greece and Cyprus were stuck in deflation. Only three euro zone members, Estonia, Latvia and Slovakia, saw consumer prices rising month-over-month in January. Italy, the EU’s third-largest economy, showed a 2.1 percent month-over-month decline, the biggest drop in the euro zone. In Germany, the continent’s largest economy, consumer prices fell by 0.7 percent in the month, keeping the annual inflation rate steady at 1.2 percent. Source: Reuters

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