Inflation remains at 1.6% in the euro area

Bloomberg.com – 31/07/13
The European Union statistics office announced on Wednesday that the annual inflation rate for the euro area was 1.6% in July 2013, the same figure that was recorded the month previous. As a result of the inflation rate holding steady for two months, the European Central Bank has been given the leeway to loosen their monetary policy on the euro-area’s 17-nation countries. July is the sixth straight month that the inflation rate has been below the ECB’s 2% ceiling, much in line with what the majority of economists have forecast.

After their last policy meeting, the ECB’s President Mario Draghi pledged to keep interest rates low for an extended period during a time of low inflation, weak credit flows and a subdued economic outlook. According to their forecasts in June, the ECB are expecting that the euro-area’s economy will contract by 0.6% in 2013 but are forecasting economic growth of 1.1% in 2014. Read More