Eurozone and US inflation falls

17 May 2013

Inflation in both the eurozone and the US has dropped to its lowest level in recent history.

April's eurozone figure fell to 1.2 per cent, which is a three-year low, while US inflation was running at 1.1 per cent - a two-year low. The target inflation for both areas stands at two per cent.

The main cause of the reduction was the lower price of oil, which is down from just less than $120 a barrel in March to about $93 a barrel now.

The sharp drop in the cost of fuel caused the US monthly inflation rate to fall at its fastest pace since December 2008.

Overall, the US economy is growing more strongly than the eurozone, but high unemployment in both economies has put pressure on wages.

Earlier this month, the European Central Bank lowered interest rates to 0.5 per cent in an attempt to spark growth.

By Asim Shah

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