Eurozone inflation slows

Euro sign1Eurozone annual inflation slowed to 2.8% in December last year, estimates Eurostat, the statistical office of the European Union. Though the latest number is down from 3% in the previous month, it is still well above the European Central Bank’s inflation target of 2%. Managing rising prices has become a precarious task for central banks around the world, including Europe’s, as higher interest rates are expected to reduce inflation but choke off economic growth. The eurozone saw economic growth of 0.2% during the third quarter of last year, according to the latest set of data available. Yet some experts fear the monetary bloc is on the verge of another recession. The Centre for Economics and Business Research, for example, predicts a “modest to severe recession” in the west. In Europe, the think thank says, economic growth is likely to decline by between 0.6% and 3%, depending on how the single currency is managed. It does, however, predict inflation to slow. Using the Monetary Union Index of Consumer Prices, Eurostat assesses early price information relating to the reference month from the member states, where data is available, as well as early information about energy prices. ©2012 funds europe

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