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Eurozone edges closer to deflation

eurozone2Eurozone inflation dropped in November to 0.3% across the region, down from 0.4% in October.

The European Central Bank considers anything below 1% to be in its deflation "danger zone". Its target is inflation close to, but below 2% but this was last the case at the beginning of 2013 and has been falling since a 3% peak in late 2011.

The flash estimate, issued by Eurostat, does not provide specific country data.

Low inflation has been blamed for holding back growth as well as consumer spending.

The current low rate has been put down to lower energy prices which fell 2.5% from October. Analysts say that energy prices will continue to fall over the coming months. This will push the inflation rate down, possibly to below zero.

Deflation should result in lower prices, but also less revenue and tax income for businesses and for government.

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