Eurozone inflation holds at 0.4%

<p>Eurozone inflation has been revised to 0.4 per cent for August.</p>

Inflation in the eurozone has been revised to 0.4 per cent during August, edging up slightly on previous estimates.

Eurostat figures show the inflation rate to have continued at the same level from July and was higher than the original forecast of 0.3 per cent. However, the figure remains much lower than 1.3 per cent recorded in August 2013. The announcement comes after the Office for National Statistics (ONS) revealed the UK's own rate of inflation.

Figures released on Wednesday (September 17th) showed a 0.1 per cent drop in the Consumer Price Index (CPI) to 1.5 per cent during August. Petrol, food and non-alcoholic drink prices all declined over the course of the month while competition between supermarkets was also highlighted as one of the factors behind the decline.

A revision in the eurozone inflation is unlikely to reduce the pressure on the European Central Bank (ECB) as fears grow about a possible deflation. Sector prices grew more than expected and all eyes will now be on ECB president Mario Draghi as he looks to boost both business and consumer confidence over the coming month.

The ECB is aiming to raise inflation to below two per cent over the next two to three years. This would represent a return to a level not seen since the first quarter of 2013 and would move away from the "danger zone" which is a dip below one per cent. Mr Draghi has maintained that this low level has not affected business investment or consumer behaviour in recent years but is wary of the concern.

A delay in consumer purchases to see if prices will be lower next year is something the ECB is keen to avoid and it is in the process of making credit cheaper in a bid to improve demand in the future.

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