LONDON (Financial Times) - Consumer prices in the eurozone rose just 0.3 per cent this month compared with the same time last year, according to estimates from the European Commission on Friday. That is down from 0.4 per cent in July and 0.5 per cent in June, marking the lowest rate since October 2009.

Some countries are already experiencing deflationary pressures. Consumer prices in Italy were 0.2 per cent lower in August than 12 months ago – the country’s first bout of deflation since 1959. Greece, Spain, Portugal and Slovenia are also experiencing falling prices.

The slump in inflation is continuing to confound the European Central Bank, which predicted only two months ago that inflation would average 0.6 per cent between July and September.

Expectations have risen that the ECB will signal at its monthly policy meeting on Thursday that it is taking steps to address the issue, after ECB president Mario Draghi said last week at Jackson Hole that the central bank would use "all the available instruments” to address low inflation.

ECB executive board member Benoit Coeure said the ECB was ready to adjust its monetary policy further if needed and boost bank liquidity in Greek newspaper Ta Nea on Saturday, Reuters reported.

Some ECB -watchers point to what could be simply temporary factors limiting price rises in the eurozone. A fall in energy prices amid oversupply of oil and other commodities has been one of the main factors pushing inflation lower. Russia’s ban on food imports from the EU is also not helping food prices to increase.

By contrast, core inflation, which excludes more volatile prices for goods like food and energy, climbed unexpectedly in August to 0.9 per cent from 0.8 per cent the previous month. Economists at HSBC say that this measure will make it easier for Mr Draghi to argue next week that the slump is down to volatile commodity prices rather than something more entrenched.

Other analysts, however, warn that what investors and consumers think will happen to prices in the future is more important. Last week, Mr Draghi warned that markets’ inflation expectations had tumbled, with the most closely watched measure – the average rate expected over five years starting in five years’ time – falling to 1.95 per cent last week, which is below the ECB’s target of just under 2 per cent.