Eurozone slides into deflation

Inflation in the eurozone fell to -0.1% in June, the first negative figure since the euro's inception. And while most expect the rate to turn positive again in a few months, there is still a risk of full-blown deflation.

The annual rate of consumer price inflation in the eurozone fell to -0.1% in June, the first negative reading since the single currency's inception. The fall was due to the decline in oil prices over the past year and the overall slide in demand amid the deepest recession since the war. Germany's inflation rate has fallen to zero, while prices have fallen over the past three months in Ireland and Spain. Meanwhile, Ireland reported an 8.5% slide in annual output in the first quarter.

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