By Jonathan Davies
The eurozone has fallen into deflation after official figures showed December's inflation to be -0.2%.
Figures from Eurostat, the EU's statistics agency, show that fuel prices were the driven force behind the deflation. If fuel prices were excluded from the equation, inflation would have been 0.6%, the same as in November.
The eurozone's services sector alone saw inflation of 1.2%.
Jeremy Cook, chief economist at World First, said: “You will only need one guess as to what represents the biggest nail in the European inflationary coffin.
“A 6.3% fall in oil price inflation in the year to December has put year-on-year prices into negative territory for the first time since 2009 in the Eurozone.
“Although oil is a convenient scapegoat for those policymakers that believe that the weakness in prices is ‘transitory’, the lack of willingness on the part of ECB policymakers to actively engage in a scheme to help promote demand in the euro area is the ultimate harvest that has been reaped."
The figures came on the day that Prime Minister David Cameron meets with German Chancellor Angela Merkel to discuss issues like the ongoing economic troubles in the EU and eurozone.
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