The eurozone remained on the edge of deflation in July after inflation across the bloc held steady at 0.2 per cent, according to a flash estimate from Eurostat, the EU’s statistical agency.  Falling energy prices helped nullify the inflationary effects of the European Central Bank’s programme of quantitative easing launched earlier this year.    Plummeting commodity prices — such as the big drop in oil — weighed on inflation across the eurozone.  While inflation in services hit its highest level in a year at 1.2 per cent, energy prices accelerated their fall, declining 5.6 per cent in July compared with a 5.1 per cent drop in June.  The estimate was in line with expectations, although some analysts had pencilled in a return to very modest deflation this month.  Inflation has been sluggish even in fast growing economies such as Spain, which this week recorded growth of 1 per cent quarter on quarter. Consumer prices in the country dipped by 0.1 per cent year-on-year during July.  Unemployment remained stable at 11.1 per cent across the eurozone in June, according to Eurostat. Big falls in unemployment in Spain and Portugal were drowned out by worsening figures in Italy, Belgium and Austria.

Click here to view full article at