Worrying eurozone inflation sags again to 0.3 pct

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Worrying eurozone inflation sags again to 0.3 pct
By DAVID McHUGH
AP Business Writer
Aug 29, 6:37 AM EDT

FRANKFURT, Germany (AP) -- Inflation in the 18 countries that use the euro sank to 0.3 percent in August, a worrying sign of economic weakness that is putting pressure on the European Central Bank to take drastic steps to save a stalling recovery.

The figure was down from 0.4 per cent in July, statistics agency Eurostat said Friday, and is the lowest since October 2009. Back then the eurozone was deep in recession following the collapse of U.S. investment bank Lehman Brothers.

The low inflation figure comes amid increasing worry about the health of the modest recovery in Europe's currency union, a major pillar of the global economy with some 17 percent of world annual output. The eurozone showed no growth at all in the second quarter as fears about the Ukrainian crisis weighed on consumers and investment decisions. Unemployment remained high at 11.5 percent in July, unchanged from the month before.

Core inflation, which excludes volatile food and energy, sent a modestly brighter signal as it rose to 0.9 percent from 0.8 percent.