Eurozone fears prospect of deflation

Sacramento News.Net
Friday 3rd July, 2009

The threat of deflation has been rolling in over the recession-hit eurozone.

European Central Bank policymakers are now widely expected to leave the 16-nation bloc's main interest rate at an all-time low of 1.0 percent.

Members have said the status quo should remain on rates until activity picks up.

Eurozone consumer prices fell in June for the first time since records began in 1996.

The major concern now is that households and businesses will postpone their spending, which will further suppress activity and threaten more jobs.

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