European stock markets ended January with their worst monthly loss since June on Friday, after an unexpected drop in euro-zone inflation added to fears of deflation in the region.
The broader markets moved lower after data showed inflation in the euro zone dropped to 0.7% in January from 0.8% in December, falling short of estimates. The data reignited fears the region is heading for a period of falling consumer prices, known as deflation, which could derail the economic recovery.
Little is left in the European Central Bank’s armory, a cut in the refinance rate looks a likely response. The ECB next meets to discuss interest rates on Thursday.
The broader markets moved lower after data showed inflation in the euro zone dropped to 0.7% in January from 0.8% in December, falling short of estimates. The data reignited fears the region is heading for a period of falling consumer prices, known as deflation, which could derail the economic recovery.
Little is left in the European Central Bank’s armory, a cut in the refinance rate looks a likely response. The ECB next meets to discuss interest rates on Thursday.