Inflation in the eurozone has turned negative, official figures have shown, with prices in December 0.2 per cent lower than the same month a year earlier.
The drop, brought on by plummeting oil prices, is the first concrete sign of much-feared deflation in the now 19 nation currency zone. Deflation is officially defined by prices falling over a longer period.
The tip into deflation is expected to make further action to stimulate the eurozone's economy by the European Central Bank more likely.
The decline was bigger than anticipated. The consensus in markets was for a 0.1 per cent fall.
The main reason behind the slide from the 0.3 per cent inflation rate recorded in November was the plunging oil price, which has been passed on to consumers at the pump.
The European Union's data agency Eurostat also reported unemployment remained at 11.5 per cent in November, unchanged from October.
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