Vanishing euro zone inflation seen intensifying ECB policy headache

BRUSSELS/FRANKFURT (Reuters) - If euro zone inflation falls deeper into the 'danger zone' as expected on Friday, it will at the very least complicate the European Central Bank's plans to wait and see whether its recent policy move to ignite the euro zone economy will work. Together with updated projections from ECB staff, the data is likely to lead to a lively discussion at the ECB's Sept. 4 policy meeting about whether to accelerate existing policy measures because of the danger of deflation. New action is unlikely though not impossible, according to ECB sources, who told Reuters the ECB is unlikely to act at next week's meeting unless the inflation figures show the euro zone sinking significantly toward deflation.

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