Eurozone CPI slowed to 0.1% yoy in May, down from 0.3% yoy. That’s also the lowest level in four years. Nevertheless, the slow down was largely driving by -12.0% yoy in energy prices. Excluding energy, CPI was unchanged at 1.4%. CPI ex energy and unprocessed food was unchanged at 1.1% yoy. CPI ex energy, good, alcohol & tobacco was also unchanged at 0.9% yoy.

Separately, ECB Governing Council member Ignazio Visco warned, “steps must be taken to counter the significant risk of low inflation and the marked fall in economic activity from translating into a permanent reduction in expected inflation or into the possible resurfacing of the threat of deflation.”

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“Also as a result of the high levels of public and private debt in the euro area as a whole, this could trigger a dangerous spiral between the fall in prices and that in aggregate demand.”

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