Deflation fear for euro prices

Tim Wallace
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THE EUROZONE edged closer to deflation in May as producer prices fell 0.1 per cent on the year, official figures showed yesterday – the fourth consecutive monthly drop.

The European Central Bank (ECB) is under pressure to print money to push prices up – the ECB’s target is to keep inflation close to two per cent.

“Expectations will likely remain pretty high that the ECB will ultimately have to take further action,” said Howard Archer from IHS.