Has deflation returned to Europe?
November 2020 was the fourth consecutive month that headline inflation for the eurozone - using the harmonised index of consumer prices (HICP) - was negative. The response to the coronavirus pandemic has caused the most severe economic shock across the continent since the Second World War. Even after the summer rebound in growth, compared to the end of last year most member states are showing shortfalls in GDP that are greater than the depths of the global financial crisis. This has raised fears of the return of deflation which at present poses a more significant danger than in 2009 or 2015, ...