Forex News – Euro zone inflation unchanged at 2.7 percent

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Euro zone inflation held steady at 2.7 percent in January, in line with expectations. The preliminary annual CPI number reported by the European Union statistics agency Eurostat on Wednesday  remains above the European Central Bank’s target of 2 percent , but has fallen from a peak of 3 percent in 2011.

Since there has been no change in inflation for the second straight month, speculation is growing that the European Central Bank will cut interest rates to help revive the economy, either in its next policy meeting this month or in March.  Some analysts forecast a cut to 0.75 percent, which would  be a  record low.

Although the CPI data is preliminary and a final reading is still due, continued slow growth in the euro zone is expected to slow inflation over the next few months as many of the euro zone’s nations slip into a brief recession in 2012.