The inflation outlook for the Euro-Zone weakened for the fourth consecutive month in September, with the CPI estimate slipping 0.3% from the previous month amid expectations for a 0.2% drop, and the European Central Bank is likely to maintain a dovish outlook for price growth as President Trichet anticipates price pressures to remain subdued throughout the second-half of the year. Nevertheless, the central bank anticipates price growth will turn positive “within the coming months” as the board forecasts the annual rate of inflation to average around 0.4% this year and 1.0% in 2010, and expectations for higher prices may lead the ECB to tighten policy going into the following year as the Governing Council maintains its one and only mandate to ensure price stability.
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