The smart money is still on more ECB action to boost inflation (Daniel ROLAND)

Brussels (AFP) – Eurozone inflation remained stable in June, data showed Friday, a month after a sharp drop had raised fears of an economic slowdown in Europe.

The EU’s Eurostat agency said inflation this month was unchanged from May at 1.2 percent, in line with forecasts of analysts surveyed by data company Factset.

The number is still far short of the ECB’s target rate of just below 2.0 percent and will not quell expectations that the powerful central bank will relaunch stimulus to boost prices in Europe.

Policy-makers at the European Central Bank are weighing whether to prop up the eurozone by slashing interest rates from their already historic lows or reactivating the central bank’s 2.6-trillion-euro ($3.0 trillion) “quantitative easing” (QE) bond-buying scheme.

ECB chief Mario Draghi earlier this month said weak economic growth and sluggish inflation could prompt force the institution’s hand to reopen the money taps.

His statement had drawn the ire of US President Donald Trump who accused the ECB of currency manipulation that was unfairly punishing the US economy.

The ECB will look closely at core inflation, which strips out volatile prices such as energy, and that rose slightly to 1.1 percent in June, from a lowly 0.8 percent a month earlier.

In May, inflation tumbled from 1.7 percent the previous month, but analysts said the fall was partly attributable to the effects on prices of a late Easter holiday.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.