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Eurozone inflation rate falls to 0.8%

The eurozone's inflation rate fell to 0.8% in December, official figures have

shown, down from 0.9% in November.

The Eurostat data means that the inflation rate has moved further away from the

European Central Bank's (ECB) target of just below 2%.

In November, the ECB cut its benchmark interest rate to a record low of 0.25%,

reflecting the low inflation outlook.

The ECB will gather for its latest meeting later this week, although no changes

to policy are expected.

The data may fuel concerns that the eurozone risks a period of deflation, in

which consumers delay purchases in the expectation that prices will fall

further.

Last week, ECB president Mario Draghi said there were no signs of deflation or

an urgent need for another rate cut. But he added that it was important that

inflation did not get stuck permanently below 1%.

Eurostat also released industrial producer price data for November, showing a

0.1% fall on the month after a 0.5% drop in October.