Eurozone deflation accelerates to record low in January

BRUSSELS, Jan 30 (AFP) : Eurozone consumer prices fell by a record-equalling 0.6 per cent in January, confirming deflation could be taking hold for the long term, EU data showed.
The drop from minus 0.2 per cent in December appears to back the European Central Bank's decision last week to launch a bond-buying spree to drive up prices.
Plummeting world oil prices were largely to blame for the fall in the 19-country eurozone, already beset by weak economic growth and high unemployment, the EU's data agency Eurostat said.
The low level matches the same drop in prices as in July 2009, at the worst of the global financial crisis.
"Falling prices Friday and alarmingly pessimistic expectations of where prices are heading in the future proves beyond all reasonable doubt it was high time to act," Richard Barwell, senior European economist at Royal Bank of Scotland Group told Bloomberg.
But he added it was "risky starting QE this late in the deflation game."
The ECB last week finally decided to embark on a quantitative easing programme involving the purchase of 1.14 trillion euros ($1.29-trillion) in sovereign bonds.