BRUSSELS, Jan 30 (Reuters) - Euro zone inflation plunged this month to its lowest in almost 10 years, data showed, boosting pressure on the European Central Bank to cut interest rates further as price growth is now well below its target.
European Union statistics office Eurostat estimated that consumer prices in the 16 countries using the euro rose 1.1 percent year-on-year in January, a level last seen in July 1999, down from 1.6 percent in December and 2.1 percent in November.
The ECB wants to keep inflation below, but close to, 2 percent and several members of its rate-setting council have expressed concern that inflation should not fall too far below the target. They have dismissed, however, any risk of deflation.
Having cut interest rates by a total of 225 basis points since October to 2.0 percent, the bank has signalled it will pause in February and consider further cuts in March.
Many economists expect the ECB to reduce borrowing costs to around 1 percent by mid-year, when inflation is likely to be negative because of a strong drop in oil prices. (Reporting by Jan Strupczewski, editing by Dale Hudson)