OECD inflation falls to 1.4pc
Wednesday, 2 April 2014
PARIS, Apr 1 (AFP): Weak energy prices pushed down inflation in advanced countries to 1.4 per cent in February from 1.7 per cent in January, the OECD said on Tuesday against a background of concern that eurozone inflation is too low.
In the eurozone, inflation "slowed to 0.7 per cent in February, compared with 0.8 per cent in January," the OECD said.
Referring to the overall figures, it said that "this slowdown in the annual rate of inflation was driven by energy prices which fell by 0.4 per cent in the year to February compared with an increase of 2.1 per cent in the year to January."
However, food price inflation rose slightly to 1.6 per cent from 1.5 per cent in January.
If the price of food and energy were excluded, inflation was steady at 1.6 per cent for the fourth month in a row.
There is concern that disinflation in many advanced countries is coming worryingly close to deflation, an absolute fall in prices, which can set in train a vicious circle of falling demand, rising unemployment, weak growth and further price falls.
Economists are waiting to see if the European Central Bank takes action at its meeting this week to prevent prices in the eurozone from falling further.
The ECB sets its price stability target at inflation of close to, but just under, 2.0 per cent.
The OECD, a policy forum for advanced democracies, said that inflation in the United States fell sharply to 1.1 per cent in February from 1.6 per cent in January and in Canada to 1.1 per cent from 1.5 per cent.
In Japan, however, inflation edged up to 1.5 per cent from 1.4 per cent.
In eurozone Italy it fell to 0.5 per cent from 0.7 per cent, and in Britain, not a member of the eurozone, to 1.7 per cent from 1.9 per cent, in both cases the lowest rates since October 2009.
In the eurozone, in Germany the rate fell to 1.2 per cent from 1.3 per cent, but in France it rose to 0.9 per cent from 0.7 per cent.
Meanwhile, in the Russian Federation, with no connection to the eurozone, inflation rose to 6.2 per cent from 6.1 per cent.