Europe fails to shake off deflation threat

London

EUROPE is failing to shake off the threat of deflation, with prices falling in Sweden, flat-lining in Britain and barely registering any increase in Germany and Italy.

Data on Tuesday underlined that central banks across the continent are making little headway in boosting inflation despite flooding their economies with cash through rock-bottom interest rates and/or outright money-printing.

At the same time, commodity prices, especially for oil, are falling on a number of factors, including an economic slowdown in China, and should feed even lower inflation over time. "It is a worry in particular in the eurozone where you still have spare capacity," said Jennifer McKeown, senior European economist at Capital Economics in Lond…