March 9, 2020 / 9:07 AM / 21 days ago

Euro zone inflation expectations gauge below 1% for first time ever

FILE PHOTO: 20 Euro banknotes are seen in a picture illustration, August 1, 2016. REUTERS/Regis Duvignau/Illustration/File Photo

LONDON (Reuters) - A key gauge of long-term euro zone inflation expectations slid below 1% for the first time ever on Monday, as the coronavirus outbreak alongside an oil price plunge made it unlikely the ECB would reach its inflation target anytime soon.

The five-year, five-year breakeven inflation forward, an inflation gauge tracked by the European Central bank, slid to 0.9737% EUIL5YF5Y=R. The ECB targets inflation at close to 2%.

The dive in inflation expectations to new record lows also came as oil prices tanked 25%LCOc1 CLc1.

Reporting by Dhara Ranasinghe; editing by Sujata Rao

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