German annual inflation slows unexpectedly, adding to the pressure for more policy easing from the ECB. And, as Laura Frykberg reports, economic sentiment in the euro zone has slipped to its gloomiest level since March.
It's Europe's largest economy. And often described as its strongest. But even the strong are vulnerable. Annual inflation in Germany has slowed this month. Growing 0.3 percent, compared to 0.4 in July. Analysts say it alone can't save the euro zone Or its low to no inflation. (SOUNDBITE) (English) FXPRO, HEAD OF RESEARCH, SIMON SMITH, SAYING: "I am not sure so much that Germany is leading the way. A lot of the belief that Germany was a sort of a powerhouse of Europe came from the labour market reforms seen sort of in the mid part of the last decade. I think that is now fading." So too is euro zone sentiment. It's fallen to its lowest level this month, since March. Confidence in Italy dropped to an 18-month low. As its banking system struggles with billions of euros in bad loans. There is an exception, and that's France. Its index rose slightly in August.