Moitinho Marta Oliveira
Prices fell 0.2% in August the previous month, causing a drop in annual inflation of 0.4%.
The annual rate of change is dropping for seven consecutive months, the data show revealed yesterday by the National Statistics Institute (INE ). The retreat of the annual rate of change is mainly the result of the evolution of prices of food and non-alcoholic beverages (fell 3.2%) and the behavior of prices of clothing and footwear (which decreased by 0.4%). Though he continued to record breaks, the annual rate of change of inflation fell less than in the previous month. In July, the annual inflation had fallen 0.9%.
The behavior of prices at European level has fueled fears of deflation and has led the European Central Bank to adopt unconventional measures. Last week, Mario Draghi announced a cut in the interest rate that serves as a reference for bank loans, from 0.15% to 0.05%. Also, lowered the interest rate that the ECB pays banks to remunerate deposits at the central bank. The rate was -0.1% and fell to -0.2%.
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