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Surprise fall in eurozone inflation

Inflation across the 18-country eurozone has been revised down to its lowest level since October, a development that may ratchet up the pressure on the European Central Bank to cut interest rates further.

Figures released by the Eurostat statistics agency today show that consumer prices in the eurozone were 0.7% higher in February than the year before. That is lower than the 0.8% initial estimate and takes the annual rate down to the level it was in October.

The rate is also way below the level the ECB targets - it sets its policy to keep inflation just below 2%.

The unexpected drop in the inflation rate is likely to reinforce concerns in the markets that the eurozone may suffer a bout of deflation, or falling prices.

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