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Inflation rate drops in eurozone

Jan. 7, 2014 at 9:51 AM

BRUSSELS, Jan. 7 (UPI) -- The annual inflation rate in the 17-member eurozone dropped in December, the regions data office Eurostat estimated Tuesday.

The official statistics office for the European Commission said its flash estimate of the annual inflation for the currency region, which could be revised later, fell from 0.9 percent in November to 0.8 percent in December.

Low inflation has caused concern in the eurozone, the 17 countries that share the euro as currency. In early November, the European Central Bank dropped its main bank-to-bank lending rate from 0.5 percent to 0.25 percent, citing low inflation that tends to rise faster when money is more readily available.

Eurostat said Tuesday that the highest inflation rate in December is expected to come from food, alcohol and tobacco products with a rate of 1.8 percent, up from 1.6 percent in November. Non-energy industrial goods are expected to have a 0.2 percent inflation rate, consistent with November. Energy products are expected to be flat in December after posting a 1.1 percent decline in November.

The central bank's target rate for inflation is 2 percent.

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