BRUSSELS: Eurozone inflation dropped to the lowest level since the worst of the global financial crisis, EU figures showed on Tuesday, heaping pressure on the European Central Bank to go even further to avert the threat of deflation.

Growing concerns about exceptionally low price rises in the 18-country eurozone, which could augur a long period of low growth and falling prosperity, have prompted the ECB to take unprecedented action in recent months. But inflation fell again to 0.3 per cent in September, the lowest for nearly five years and way below the ECB’s near-2pc target.

The EU’s data agency Eurostat also reported that eurozone unemployment remained unchanged at a high 11.5pc in August, another sign that a hope for recovery in the currency area was certainly over.

“September’s fall in eurozone inflation to a whisker above zero and August’s weak labour market data will add to the pressure on the ECB in the run-up to its meeting this Thursday,” said Jennifer McKeown, Senior European Economist at Capital Economics in London.

Published in Dawn, October 1st, 2014