Official figures show that consumer prices in the euro zone countries fell at an annual rate of 0.2% in August. This was much smaller than the record 0.7% annual fall registered in July.
Preliminary August figures from the Eurostat data agency marked the third month of falling prices - the first falls since the euro bloc was formed in 1999. The downward trend began in June with a 0.1% fall.
After hitting a record high of 4% in June and July 2008, euro zone inflation has fallen sharply as oil and other commodity prices have collapsed in the face of the global economic downturn. The consumer credit crunch has also hit spending, and therefore prices.
Most economists expected euro zone inflation to dip briefly into negative territory but they have ruled out a longer downward spiral in prices like that experienced in Japan in the 1990s.
Nevertheless, euro zone consumer price inflation seems highly likely to remain below the ECB's target of close to, but just below, 2% for some considerable time to come.
