The recent further falls in global oil prices look set to push euro-zone consumer price inflation - already very low at just 0.3% in November - below zero in the early months of 2015. Provided that oil prices stabilise, the period of falling prices should prove to be fairly short-lived, like that seen back in 2009 when oil prices last fell sharply. But with economic activity in the currency union set to remain very weak, plenty of spare capacity in the economy and growing signs that inflation expectations have become de-anchored, there is a clear danger of a more prolonged and damaging bout of deflation.
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