Business

Eurozone inflation remains weak in August

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Eurozone inflation remained weak in August, raising the prospect of further action from the European Central Bank to stimulate the bloc's economy.

Inflation in the eurozone was 0.2%, unchanged from July and below analysts' forecasts of a slight increase.

The ECB has introduced a number of stimulus measures, but the inflation rate still remains some way off the bank's target of just below 2%.

Separate data showed the unemployment rate remained at 10.1% in July.

Analysts had been predicting a slight fall in the jobless rate.

ECB meeting

Eurozone inflation remained unchanged as prices of food, services, and industrial goods rose by less than in July, while the drop in energy prices was not as sharp.

In March this year, the ECB stepped up its attempts to stimulate the eurozone's economy, cutting its main interest rate from 0.05% to 0% and its bank deposit rate from minus 0.3% to minus 0.4%.

The ECB has stepped up its programme of quantitative easing, and is now buying €80bn worth of bonds a month.

The bank's rate-setting Governing Council is due to meet next week, although analysts are not sure whether it will announce new policy measures at the meeting.

"It looks to be a very tight call as to whether or not the ECB acts on 8 September or decides to maintain a 'wait and see' stance as to how the Eurozone economy is performing - we marginally lean towards the 'wait and see' view," said Howard Archer, chief UK and European economist at IHS Global Insight.

However, Stephen Brow of Capital Economics said: "There is a strong case for the ECB to announce further policy easing. This could come as soon as the bank's meeting next week."