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Headache for ECB as Eurozone falls into deflation again

Published 30/09/2015, 16:07
Updated 30/09/2015, 16:07

Investing.com - Euro zone inflation turned negative again in September as oil prices tumbled, raising pressure on the European Central Bank to beef up its asset purchases to kick start anaemic price growth.

Prices fell by 0.1% on an annual basis, the first time since March that inflation has dipped below zero.

The negative reading is a headache for the ECB, which is buying 60 billion euros of assets a month to boost prices. It has already said it may have to increase or extend the quantitative easing scheme because inflation may fall short of its target of almost 2% even in 2017.

ECB President Mario Draghi, though striking a balanced tone, stressed last week that the ECB was ready to act and had much flexibility regarding the scale, composition and duration of its asset purchases.

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