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Germany slips into deflation as eurozone figures worsen

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02/02/2015
Germany has fallen in to deflation for the first time in more than five years, with eurozone figures falling to the equal lowest level on record.

Inflation fell below zero for the first time since October 2009, according to preliminary estimates from statistics agency Destatis, as prices dropped by 0.3 per cent in the year to January.

Analysts had expected deflation – but not at this pace, according to the Telegraph.

A poll suggested that prices would fall by 0.2 per cent in the period. Final results for January will be published on 12 February. Separate eurozone-wide figures published later this morning showed prices fell by 0.6 per cent in the year to January, worse than the 0.5 per cent slide that had been expected and the lowest since July 2009. It follows a 0.2 per cent drop in December.

Falling oil prices has reduced inflation pressures across the globe, including in Germany. But core inflation, which strips out energy and food, also likely fell, economists said.

The negative inflation figures from Germany made it the latest eurozone country to slip into deflation. Bank of England governor Mark Carney warned earlier this month a period of deflation in the UK is possible after price growth fell to 0.5 per cent in December.

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