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Greek Inflation Falls Further

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Greek Inflation Falls Further

Greek inflation figures for the month of April have shown little of the expected improvement. The Consumer Price Index year on year has remained steady at -1.3%, the anticipated consensus was for a slight pick up to -1.2%. The CPI Harmonized year on year number fell further to -1.6% from -1.5% in March, again there were hopes for an improvement in this metric to -1.2%.

Further confirmation of the lack of pick up in the Greece came from the Industrial Production numbers. The Greek economy suffered a reversal in March falling from 3.1% expansion the prior month to -3.1% this month.

The European Central Bank (ECB) offered little in the way of hope to Greece or the other recovering periphery economies of the Eurozone yesterday when it refused to provide monetary stimulus to the single currency bloc.

The Bank left the key Refinance Rate unchanged at 0.25% and also left the Overnight Deposit Rate untouched at 0.0%. In a move that has further kicked the can down the road the ECB also postponed any action to inject liquidity into the economy through a much-heralded quantitative easing programme.

The President of the ECB, Mario Draghi, in his post meeting press conference re-affirmed that the Bank stood ready to take action next month once it’s economists had studied updated data on the Eurozone’s fundamentals.

Draghi also rounded on the various institutions and countries that have been putting pressure on the Bank to take action. Members of the French Parliament, the International Monetary Fund and the US Treasury Secretary have all called for ECB action over the past month. Thanking them for their advice he stressed the independence of the ECB and noted that responding to outside pressure would put the long term creditability of the institution at stake. Despite this it is likely that the ECB will face further calls for action over coming weeks.

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