Eurozone inflation has dropped again, falling from a sluggish 0.4 per cent to 0.3 per cent.
Expectations of the fall pushed the Euro to a two-year low of $1.2659 against the dollar in morning trading.
We stand ready to use additional unconventional instruments within our mandate, and alter the size and/or the composition of our unconventional interventions should it become necessary to further address risks of a too prolonged period of low inflation.
Other recent figures have proved mixed. Unemployment for the Eurozone was bang on expectation at 11.5 per cent, with Italian youth unemployment hitting a new record high of 44.2 per cent.
German inflation was 0.8 per cent year on year, unchanged from August. Analysts at Rabobank said a fall in commodity prices was limiting the inflationary recovery:
These figures provide some indication that German disinflation pressures are gradually starting to wane. Clearly, the recent fall in commodity prices is limiting any near-term recovery in inflation, although it is being partly offset by the weakening of the euro.