Eurozone deflates: Prices going down, again, but maybe not for long
The Eurozone fell back into deflation in April, as prices dropped by 0.2 per cent over the year, official statistics out yesterday showed.
Falling transport and energy costs pushed the headline rate of inflation down from zero in March. It marks the second month of deflation this year for the Eurozone after oil price volatility in February sent inflation crashing down.
In a sign that higher prices may be around the corner, however, the cost of goods in every sector except energy and tobacco went up during the month.
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Consumer confidence is rising across the Eurozone, the unemployment rate of 10.3 per cent is its lowest level since August 2011, and GDP figures for the first quarter, while recently revised down, are still ahead of the other major advanced economies.
With oil prices also hitting a six-month high, there are signs that demand should hold up across the Eurozone and prices could head north in the coming months.