Deflation has returned to Europe.
Official data shows consumer prices across the eurozone fell by 0.2% in December, marking the first time prices have fallen in the region since the Great Recession in 2009.
The figure was worse than most analysts were expecting. Eurozone inflation stood at 0.3% in November.
Falling consumer prices could herald worse times to come for Europe’s stagnant economy because they encourage people to hold off making purchases in the hopes of cheaper deals in the future.
It’s widely expected that the European Central Bank will swoop in later this month with a program of quantitative easing — massive purchases of government bonds — to try to stimulate the economy and prop up prices.
The ECB has been discussing its own version of QE for weeks and it could announce the program launch as early as January 22, after its next policy meeting.
