Eurozone consumer prices reached a standstill in April

Eurozone consumer prices stopped falling in April after having had declined for four consecutive months as per official data, alleviating fears that Europe could slide into deflation.

According to the European Union statistics agency Eurostar, consumer prices has been exposed to declines in each month since December.

Thus, the European Central Bank decided to launch a quantitative easing program earlier this year to counter the fall in prices.

It will mainly consist of buying more than €1 trillion ($1.11 trillion) of most of its members’ governments bonds by late September 2016.

In fact, the central bank presumed that the decline in energy prices would have triggered further affected other consumer goods and services.

At a news conference, the ECB president Mario Draghi affirmed that this risk has only been avoided due to the monetary policy used.

Moreover, it seems that inflation has shown up much earlier than the ECB predicted, suggesting that the quantitative easing measure is definitely keeping the recovery at a steady pace.

But the earlier-than-expected end period to the decline in oil prices has already given rise to much speculation in the financial market, highlighting that the ECB might intend to review the bond purchase schedule or might buy in smaller quantities only.

Nevertheless, a governing council member, Ardo Hansson, said that it is too early for ECB to discuss of whether to put an end to the QE program based on the current situation.

Source:The Wall Street Journal
Priscilla Camryn By: Priscilla Camryn
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