European Inflation Rate Holds Near Lowest Since 1999

Inflation in Europe stayed close to the lowest rate since 1999 in February as the global financial crisis undermined consumer confidence and curtailed spending., Bloomberg 3/2/2009 7:31:55 AM

Consumer prices in the euro area rose 1.2 percent, compared with a 1.1 percent increase in January, the European Union statistics office in Luxembourg said today. The January reading was the lowest since July 1999.

Oil prices have plunged 70 percent from an all-time high last summer as the financial turmoil has curbed global growth and pushed the euro-zone economy into its worst recession since World War II. The European Central Bank has signaled it is ready to cut interest rates to a record low this week to bolster the economy.

Inflation in Germany, Europe’s largest economy, and Italy unexpectedly accelerated in February. The German inflation rate rose to 1 percent from 0.9 percent in January, led by rising prices for package vacations and motor fuels, the Federal Statistics Office in Wiesbaden said last week.

Europe’s manufacturing industry shrank at a record pace in February as export orders collapsed and companies scaled back production, Markit Economics said today. A gauge of manufacturing activity declined 33.5 from 34.4 in January, falling more than initially estimated.

The inflation report released today is an estimate. The statistics office will publish a detailed breakdown of the data, including energy-price inflation as well as the core rate, on March 16.

European Inflation Rate Holds Near Lowest Since 1999