Weak European inflation bolsters case for stimulus

BRUSSELS (AP) — Inflation in the 19-country eurozone was stuck at a low annual rate of 1% in August, potentially bolstering the argument for the European Central Bank to provide more stimulus to the economy when it meets next month.

Statistics agency Eurostat said Friday that the inflation rate was the same as in July as energy prices were down from a year earlier and price gains for industrial goods and services remained subdued.

Weak price increases can be a sign of economic stagnation, and inflation is currently well below the ECB’s goal of just under 2%.

The central bank is due to next meet on Sept. 12 and some analysts believe it will cut interest rates or even resume a bond-buying stimulus program in an attempt to boost lending and economic activity.

Categories: International News