Euro zone inflation drop in January gives ECB fresh headache

Euro zone consumer prices dropped in January, bucking market expectations for a rise and providing a possible trigger for further easing by the European Central Bank to sustain a fragile recovery and ward against deflation. Consumer prices in the now-18-country bloc fell to 0.7 percent year-on-year in the first month of 2014, down from 0.8 percent in December, data from the EU's statistics office Eurostat showed on Friday. "The ECB's sensitivity to inflation data was already high and even a small surprise like this one today might tip the balance towards more easing," said Frederik Ducrozet, a senior euro zone economist at Credit Agricole.

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