BRUSSELS — Europe’s labor market remained in
the doldrums in December, while the inflation rate ticked back down to the same
level that recently led the European Central Bank to cut interest rates,
official data showed Friday. The reports suggested that the bank will be under
pressure to provide more monetary stimulus to keep a nascent recovery alive.
Euro zone money supply growth slowed sharply in December and loans to the
private sector contracted further, putting pressure on the European Central
Bank to take fresh action to counter the threat of deflation.
zone inflation running well below its target, the ECB forcefully underlined its
determination earlier this month to take action should a deflation risk arise
or rising money market rates threaten the bloc's fragile recovery.
released by the ECB on Wednesday showed that euro zone M3 money supply - a
general measure of cash in the economy - grew at an annual pace of 1.0 percent,
slowing markedly from 1.5 percent in November.
Prices Persist Despite Years of Easy Money; Deflation Still a Threat
REDDY in Washington, BRIAN BLACKSTONE in Frankfurt and JASON DOUGLAS in London
Dec. 17, 2013 7:28 p.m. ET
is slowing across the developed world despite ultralow interest rates and
unprecedented money-printing campaigns, posing a dilemma for the Federal
Reserve and other major central banks as they plot their next policy moves.
European shares steadied on Thursday after three days of selling, as focus
turned to whether the European Central Bank will offer any new economic
stimulus after the Bank of England left its interest rates at a record low.
remained under pressure amid speculation about the future of U.S. monetary
stimulus. That kept bond yields elevated and left shares struggling to recover
from this week's declines.
shares .FTEU3 were virtually flat before the 1245 GMT ECB rate decision and
1330 GMT news conference, as traders waited to hear what the head of the bank,
Mario Draghi, had to say..EU
Without the tool of currency
devaluation, the euro zone is hoping “internal devaluation” can restore
competitiveness to the bloc’s periphery. What’s that?
economy-wide fall in wages and, more broadly, prices. Officials have been
careful not to say the “D” word – that’s “deflation” – but Europe’s
policies call for a period of deflation in euro-zone countries with the worst