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Eurozone countries returned to deflation in September 2015 as prices fell at an annual rate of 0.1%, according to the Eurostate statistics agency.

It is the first time inflation had turned negative for six months, with an 8.9% fall in the price of energy largely responsible for the decline.

Core inflation in the countries that use the euro – which strips out energy and food prices – showed a 0.9% rise, the same as August.

The Eurostat statistics agency also said the eurozone’s unemployment rate for August was unchanged at 11%.

Photo Getty Images

Photo Getty Images

Mario Draghi, the president of the European Central Bank (ECB), warned earlier this month that inflation could turn negative.

The ECB expects inflation to be 0.1% in 2015 as a whole, rising to 1.5% in 2016 and 1.7% in 2017.

The bank is spending €60 billion on asset purchases, under its program known as Quantitative Easing (QE), every month for the next year in an attempt to boost prices.

However, the latest figures increase pressure on the bank to increase the spending or carry it beyond September 2016.

Deflation has deepened across the 19 countries that use the euro currency.

In January, prices in the eurozone were 0.6% down on their levels a year ago.

The figure shows the eurozone heading deeper into deflationary territory from December, when prices were 0.2% down on the year before.

A large contributor to falling prices is the cost of energy, with oil prices down almost 60% on the middle of last year.

Energy prices plunged 8.9% in January.

If food and energy are stripped out of the calculations, eurozone prices were still rising at an inflation rate of 0.5%, down from 0.7% the month before.Eurozone deflation January 2015

The eurozone has only once before experienced deflation at these levels, in July 2009, as the region first went into recession following the financial crisis.

Last week the European Central Bank (ECB) launched a program aimed at pushing prices back up – known as quantitative easing – through which it injected around 1 trillion euros into the economy.

Christian Schulz, senior economist at Berenberg Bank said the latest figures showed that “the ECB was … more than justified in taking aggressive action earlier this month.

“The multi-stimulus of cheap oil, a weak euro and aggressive monetary easing is now stabilizing expectations and will help the ECB reach its price stability target over time.”

There was better news on eurozone unemployment, which fell to 11.4% in December, down from 11.5% in November.

Within that figure there are huge differences between jobless levels in different countries.

Germany has a 4.8% unemployment rate. But 25.8% of Greece’s labor force is out of work and Spain’s jobless rate is 23.7%.

The euro was slightly higher after the news, rising 0.35% against the dollar to $1.1358, and sending the pound down 0.25% to €1.3276.

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