Euro prices in fresh decline

EUROZONE consumer prices fell in August for a third consecutive month, though the rate of deflation narrowed significantly from July and economists predicted prices would start to rise again within months.<br /><br />Consumer prices fell by 0.2 per cent year-on-year in August, down from the 0.7 per cent decline the Eurozone countries experienced in July.<br /><br />But economists said the fall was primarily due to rising oil prices, which recently recovered to a ten-month high of around $75 a barrel.<br /><br />&ldquo;It seems highly probable that July marked the deepest deflation in the Eurozone and consumer prices will turn positive year-on-year within the next couple of months,&rdquo; said Howard Archer, chief UK and European economist at IHS Global Insight.<br /><br />Clemente de Lucia, an economist at BNP Paribas, also expects inflation to rebound in the last quarter of the year.<br /><br />&ldquo;Starting from August, energy base effects should begin to push inflation higher,&rdquo; he said.<br /><br />But though France and Germany came out of recession in the second quarter, economists agreed economic pressures would keep Eurozone inflation muted for the foreseeable future.