The eurozone inflation rate
has fallen to 0.3% in August, near a five-year low, adding to fears of a
deflationary spiral, according to Eurostat figures.
The drop, driven by lower food
and energy prices, will add to pressure on the European Central Bank (ECB) to
take action to stimulate the economy.
Separate figures showed the
unemployment rate remained near a record high at 11.5% in July.
The ECB meets next Thursday
to decide on interest rates.
Most analysts are not
expecting any action yet, but speculation is growing that in the coming months
it may inject money into the system, a practice called quantitative easing, in
the hope of stimulating growth and pushing up prices.
Mario Draghi, head of the
ECB, has previously described inflation at below 1% to be in a
