BRUSSELS/FRANKFURT (Reuters) – Euro zone inflation fell deeper into negative territory last month, raising pressure on the European Central Bank to add stimulus, as an ongoing recession will keep price growth below its target for years to come.
Annual inflation in the 19 countries sharing the euro fell to minus 0.3% in September, its lowest in more than four years, from minus 0.2% a month earlier. That fell short of expectations for an unchanged reading, data from Eurostat showed on Friday.
More worryingly for ECB policymakers, underlying inflation, which excludes volatile food and energy costs, fell to 0.4% from 0.6%, far from the ECB’s target of almost 2%. Services inflation slowed further and the cost of imported industrial goods fell.
Although the ECB has unleashed unprecedented stimulus this year to combat a pandemic-induced economic shock, rising unemployment, surging savings, widespread restrictions on travel and plummeting business investment have proved an