Eurozone inflation at zero leaves room for ECB to act

Information technology services company ATOS CEO Thierry Breton, second left, and Christophe de Maistre, Chief Executive Officer of Siemens France, right, speak with German Chancellor Angela Merkel, French President Francois Hollande, center, and European Commission President Jean-Claude Juncker, left, during a workshop on new technology during a Franco-German digital summit at the Elysee Palace in Paris Tuesday, Oct. 27, 2015.The leaders of France, Germany and the European Union's executive body are expected to push for better access to financing for startups in an effort to boost the digital economy across the continent.(Philippe Wojazer, Pool via AP) Information technology services company ATOS CEO Thierry Breton, second left, and Christophe de Maistre, Chief Executive Officer of Siemens France, right, speak with German Chancellor Angela Merkel, French President Francois Hollande, center, and European Commission President Jean-Claude Juncker, left, during a workshop on new technology during a Franco-German digital summit at the Elysee Palace in Paris Tuesday, Oct. 27, 2015.The leaders of France, Germany and the European Union's executive body are expected to push for better access to financing for startups in an effort to boost the digital economy across the continent.(Philippe Wojazer, Pool via AP)

By Associated Press October 30, 2015 2 min read

FRANKFURT, Germany (AP) – The annual inflation rate in the 19 countries that use the euro crept up to zero in October, a weak reading that could help push the European Central Bank to expand its stimulus program.

The rate rose from minus 0.1 percent the month before, the European Union statistics agency Eurostat said Friday.

Falling energy prices were a major factor in keeping the rate low. But weak price increases are also a sign of less than robust demand in the economy.

Fears of continued low inflation could lead the ECB to extend its stimulus program, in which it buys bonds from banks using newly printed money. The bond purchases are slated to run at least through September 2016, but the ECB has indicated it could decide to expand that program or deploy a different form of stimulus at its December meeting.

The 1.1 trillion euro ($1.2 trillion) stimulus program in essence prints new money – something only the central bank can do – and pushes it into the financial system through banks in the hopes that they will lend more and help businesses expand and hire.