Draghi Under Pressure As Euro Area Price Cuts Intensify

By Unknown

Rabu, 29 Juni 2016

Draghi Under Pressure As Euro Area Price Cuts Intensify

• manufacturing, lower prices of services highlight inflation concern
• index of purchasing managers is 4 month low in January

manufacturing and services to the industries euro zone cut prices at the fastest pace in nearly a year in January, highlighting concerns about the low inflation in the region.

Markit Economics said its composite index of purchasing managers for January was "disappointing" and raises the possibility that the European Central Bank will again pump his stimulus program. The PMI fell to 53.6 - a four-month low -. 54.3 in December, and measuring output prices fell to the lowest since March

"Most disturbing of all of a view maker is intensifying deflationary pressures, "said Chris Williamson, chief economist at Markit in London. "This raises the question whether existing stimulus was simply inadequate, or if monetary policy is ineffective."

ECB President Mario Draghi said the Governing Council will consider its relaunch in March amid signs that the oil price fall will push the inflation rate of zero euro area. The Bank of Japan has already reacted to the deteriorating outlook with rates and negative interest investors see a slower pace of tightening from the Federal Reserve.

In the eurozone, Markit said the PMI had some "slightly positive signs," to higher employment levels and backlogs. The overall number of composite was also slightly better than the original estimate, and it remains above the key 50 level which separates the expansion of contraction.

The services index slipped to 53.6 from 54.2, matching the preliminary reading.

summary report went on to point out discrepancies in the economy of 19 countries, with Spain and Germany leading the growth. France offered a disappointing reading, the index just 50.2, lower than the 50.5 initial estimate. Growth in Italy has also slowed.

Bloomberg

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