Euro-Zone Inflation Holds at 1.2% as ECB Prepares More Stimulus
Lackluster prices and downside risks from global trade tensions have caused the ECB to consider stimulating the economy.
(Bloomberg) --
Euro-area inflation was unchanged well below the European Central Bank’s goal in June, despite a faster-than-expected pickup in underlying prices.
The rate of growth was 1.2% this month, in line with economists’ estimates. The core measure, excluding energy, food and tobacco, picked up to 1.1%. The ECB’s target is to restore inflation to just below 2% over the medium term.
Lackluster prices and downside risks from global trade tensions have prompted the ECB to consider adding more monetary stimulus for the economy. President Mario Draghi said last week that officials will act if the outlook doesn’t improve, stoking speculation that interest rates will be cut further from record lows this summer.
The ECB’s next policy meeting is July 25. Monetary policy makers around the world have turned dovish in recent months as global growth has slowed. The Federal Reserve is expected to cut rates this year, while nations including Australia, Russia, India and Chile have already started easing.
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--With assistance from Barbara Sladkowska and Zoe Schneeweiss.
To contact the reporter on this story: Paul Gordon in Frankfurt at pgordon6@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
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