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Euro zone inflation rose to 0.7 per cent in April

Published on Apr 30, 2014 6:29 PM

BRUSSELS (AFP) - Euro zone inflation rose to 0.7 per cent in April, slightly below analyst forecasts but up from the 0.5 per cent reported in March which was the lowest rate since October 2009, official data showed on Wednesday.

Analysts had expected April inflation at around 0.8 per cent, against a background of concern that the euro zone was unduly close to deflation. The Eurostat data agency said service sector prices rose 1.6 per cent in April, up from a rate of 1.1 per cent in March.

However, the rate of increase in food and alcohol prices fell to 0.7 per cent, down from 1.0 per cent, while energy fell 1.2 per cent after a drop of 2.1 per cent in March.

Inflation in the 18-nation euro zone has fallen steadily in the past year, reflecting weak demand as the economy recovers slowly from a record recession. The March figures in particular added to concerns over deflation - falling prices which can undercut growth.

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