Disappointing data from the eurozone today paved the way for emergency measures from European Central Bank president Mario Draghi to boost growth.
The latest figures confirmed a lacklustre 0.2 per cent advance across the 18-nation single currency bloc in the opening quarter of the year, far short of expectations.
Only Germany, accounting for nearly a quarter of the region’s output, registered a significant advance as France stagnated and Italy, the Netherlands and Portugal went backwards.
The anaemic growth performance comes amid dangerously low inflation, which sank to just 0.5 per cent in May, far below the ECB’s target of close to 2 per cent.
The ECB is expected to cut its main interest rate tomorrow and impose a negative deposit rate for the first time, effectively charging banks to hold reserves at the central bank to encourage lending.
IHS Global Insight’s Howard Archer said the figures “reinforced the case” for bold action.