ECB Under Further Pressure as Eurozone Producer Prices Fall

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http://online.wsj.com/articles/ecb-under-further-pressure-as-eurozone-producer-prices-fall-1412240475



The continuing decline in prices of goods coming from Europe's factories suggests the economy will add to pressure on the European Central Bank to ease its policy.

ECB Under Further Pressure as Eurozone Producer Prices Fall
Paul Hannon
Updated Oct. 2, 2014 5:09 a.m. ET

Prices of goods leaving the eurozone's factory gates continued to fall in August, an indication that the currency area is set to remain mired in a state of very low inflation that threatens to weaken its fragile economy still further.

The European Union's statistics agency said Thursday that producer prices fell 0.1% from July, and were down 1.4% from August 2013. Producer prices rose in June, but that is the only month this year in which they have done so.

The decline in the prices of goods leaving eurozone factories suggests consumer prices are unlikely to rise much in coming months. Eurostat on Tuesday said the annual inflation rate fell to 0.3% in September from 0.4% in August, its lowest level since October 2009 and well below the European Central Bank's target of just under 2%.

The producer price figures were released as members of the ECB's governing council met in Naples, Italy, to decide whether to add to the two waves of stimulus measures they have announced since June.