A steep drop in energy prices held down prices in the Eurozone in August, according to figures released by Eurostat this morning.
Energy prices fell 7.2 per cent in July, dampening overall annual inflation to 0.1 per cent in August, down from 0.2 per cent in July. The biggest price fall was in Cyprus at 1.9 per cent while the largest increase was in Malta at 1.4 per cent.
The data shows the European Central Bank (ECB) is still some way from hitting its two per cent target.
The figures come as European officials continued to hint they could bolster stimulus measures.
The ECB is thought to be leaning toward expanding its €1.1 trillion (£800bn) asset purchase programme, with ECB vice president Vitor Constancio this week playing down the size of the stimulus measure.
“The total amount that we have purchased represents 5.3 percent of the GDP of the euro area, whereas what the Fed has done represents almost 25 percent of the U.S. GDP, what the Bank of Japan has done represents 64 percent of the Japanese GDP and what the U.K. has done 21 percent of the UK’s GDP," he said in an interview with Thomson Reuters. "We are very far from what the major central banks have done using these instruments."
“There is scope [to bolster the programme], if the necessity is there”.
Economist Ken Wattret from BNP Paribas said: “This strongly reinforces the impression from recent communication that the ECB has room to do more if needed – and potentially much more.”