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Eurozone consumer price slump eases back in February

The fall in oil prices helped keep Eurozone inflation down in negative territory last month, but prices fell at a slower pace than at the start of the year.

Consumer prices in the 19-member bloc fell by 0.3pc in February, better than the 0.6pc fall recorded in January.

Oil prices remain well below the levels seen a year ago, but they have been rising again, which have helped to stave off a greater price fall.

Separate figures also released by Eurostat yesterday showed that unemployment in the Eurozone dropped to 11.2pc last month – its lowest level in almost three years – giving a double bout of positive data for the bloc. Ireland’s unemployment rate stands at 10.4pc.

“A double dose of good news for the Eurozone,” Howard Archer, economist at IHS Global Insight, said of the figures.

“This may dilute fears that pervasive deflation could become entrenched in the Eurozone with long-term debilitating growth effects,” Mr Archer added. “The further drop in unemployment should be supportive to consumers and they are benefiting from the boost to their purchasing power coming from deflation.”

Eurostat said that much cheaper energy and a 0.2pc decline in prices of non-energy industrial goods were the main factors pulling down the overall inflation index.

Without the volatile energy and unprocessed food components, a measure the European Central Bank (ECB) calls core inflation, prices grew 0.6pc year-on-year, the same as in January.

“With oil prices gently moving higher, we forecast that the negative impact of energy price falls on headline inflation will eventually wane in the rest of the year,” said Gizem Kara, economist at BNP Paribas.

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