Christmas shopping tumbles in the euro zone

The euro zone's Christmas shopping season was a sore disappointment as demand for retail goods fell sharply, adding to the risk of deflation for the currency bloc. Despite signs of a recovery, the sinking demand for consumer goods follows a surprise fall in euro zone inflation in January to 0.7 percent, far below the European Central Bank's target of just under 2 percent and near four-year lows. Expectations are growing among economists for more ECB action, including a possible rate cut to zero when the Governing Council meets on Thursday. Even if we do see some modest growth in the economy, that doesn't mean that inflation risks are immediately disappearing," said Giada Giani, an economist at Citigroup.



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