Weak inflation figures hit euro zone, but not expected to jolt ECB

Weak price pressure in Germany and Spain compounded the European Central Bank's policy headache on Thursday but it is still expected to hold off action next week, waiting to assess the impact of its new round of stimulus. Brighter euro zone economic sentiment and expectations for a rise in corporate loan demand in the coming quarter offset the bleak inflation readings and gave the ECB some grounds to hold off at least another month before taking any possible further action. This, along with the ECB's commitment to an expansionary policy with further measures if needed, is keeping downward pressure on the euro, which should in turn support the euro zone economy. In a sign that support may be beginning to take hold, euro zone economic sentiment unexpectedly rose in October, picking up from a near one-year low in September.



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