Frankfurt In June, the price increase in Germany had again increased slightly. The inflation rate rose to 1.6 percent. Despite the increase, inflation is below the target of the European Central Bank (ECB), which aims for the Eurozone to reach just under two percent in the medium term, which is considered to be ideal for the economy.
Worry about economic downturn
For years, the central bank has tried to push inflation in the eurozone towards its target of just under two percent. For example, it has lowered its key interest rates to zero percent, and banks that hold excess liquidity with it even have to pay a minus interest rate of 0.4 percent. She has also bought securities for over two trillion euros.
Last week, ECB President Mario Draghi hinted at a renewed easing of monetary policy at the ECB's monetary policy meeting. xxxxxx
At the central bank, many are worried that the eurozone is facing a severe economic downturn. For example, data for the euro area has recently been extremely weak and inflation expectations have been in free fall. For central bankers, this is an alarm signal, because the actual price increase often follows the expectations. Not only is the escalating trade conflict causing long-term stress, Brexit and the situation in Italy are also very risky.
Inflation (t) Consumer Prices (t) European Central Bank (t) Oil (t) Euro (t) Euro Area (t) Oil Prices (t) ECB (t) Monetary Policy (t) Economy (t) KfW