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Eurozone’s second month of deflation raises pressure on ECB

“We had expected the core rate to fall as summer sales extended into September, which is later than usual, pushing down clothing and footwear inflation,” said Jack Allen-Reynolds, economist at Capital Economics.  But Mr Allen-Reynolds said “weak aggregate demand” was likely to keep inflation well below the ECB’s target and meant it was likely to “loosen monetary policy further, perhaps before the end of the year”.
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