Euro-zone inflation falls at record speed

The prices of consumer goods in the euro zone fell in January from December at the steepest rate since records began in 2001, a new sign that domestic demand is ailing and will continue to hinder an economic recovery                                         
The weak month-to-month inflation reading could increase pressure on officials at the European Central Bank to take action to support the economy at their next policy meeting on March                            

Eurostat, the European Union’s official statistics agency, said Monday that consumer prices in the 18 nations that use the euro fell 1.1% in January from December, a record fall driven by sharpest decline in underlying inflation in a year

That “core” gauge of prices, which excludes the relatively volatile prices of energy, food, alcohol and tobacco, dropped 1.7% on the month                                         

Eurostat said the annual rate of inflation was unchanged in January at 0.8%, close to a four-year low and less than half the ECB’s target of a little under 2%
The statistics agency had previously estimated the annual inflation rate at 0.7%                                         
The ECB cut its main interest rate in November to a record-low 0.25% to try to support the region’s economy, but has since held off further action as officials wait to see how a nascent recovery pans out
Slowing inflation has put pressure on the bank to act to boost the economy and ward off the threat of deflation, or outright falls in prices that could cause long-term damage to the economy akin to that suffered by Japan in the 1990s and 2000s.