Reduced Fear of Deflation in the Euro Area |

Just over a year ago there were more countries in the Euro Area actually in deflation or at zero inflation than nations with positive inflation rates. A cyclical upturn in the European economy is helping to reduce the risks associated with price deflation as the chart below shows. Euro area annual inflation was confirmed at 1.4% in May 2017, the UK has the third highest inflation rate in the EU (2.9%).

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