World Economy

Euro zone inflation, unemployment hold steady

Euro zone annual inflation held steady at 0.2 percent in July, far below the European Central Bank (ECB)'s target and disappointing those who hoped monetary stimulus would provide a quick answer to the region's torpor.

The 0.2 percent figure is the flash estimate from Eurostat, the statistical office of the European Union, and suggests a flatlining of inflation.

Prices rose by 0.2 percent in June and 0.3 percent in May, after a flat reading in April.

Price reductions in Berlin, Germany
Sean Gallup | Getty Images

May's pick-up boosted hopes that inflation was returning to the 19-country single currency zone, which dipped into deflation earlier in the year.

However, prices have failed to accelerate since May, with inflation remaining far below the ECB's target of close to 2 percent.

This will provide further impetus for the central bank to continue its 1 trillion euro ($1.1 trillion) stimulus program of asset purchases launched in March. The ECB has already signaled that this stimulus will continue well into next year.

Unemployment also held steady in June at a seasonally adjusted 11.1 percent, Eurostat reported Friday.

As expected, unemployment was highest in Greece, where over a quarter (25.6 percent) of the population were unemployed in April—the latest month for which data is available.

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