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Wednesday, 4 May 2016

Looks like negative rates won’t save euro inflation- European Commission

It looks like the eurozone’s aggressive monetary policies aren’t cutting muster as the European Commission (EC) once again downgraded its inflation forecasts due to low oil prices and the global economic shortfall, according to the FT (paywall). The EC expects inflation would only rise to 0.2% this year, down from a 0.5% forecast in February. “Oil prices fell again at the start of 2016, dragging inflation below zero,” the commission said. “External price pressure is also weak due to the slight appreciation of the euro and overcapacities in several emerging market economies that are holding back global producer prices.”

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