Global deflation alarms ring louder

While the pulse of activity was livelier in other parts of Asia – Japan, India and South Korea – they too shared a common condition of slowing inflation.

Central banks from Switzerland to Turkey via Canada and Singapore have already loosened monetary policy in the past few weeks.

The European Central Bank also announced a near-trillion-euro quantitative easing programme in a bid to revive inflation and drive up growth, though much of the bloc’s Purchasing Managers’ Index survey was collated before that announcement.

“There are a lot of places where central banks are focusing on easing rather than anything else. In the eurozone the ECB is going all-out now,” said Jacqui Douglas, senior global strategist at TD Securities.

“Looking at the rest of Europe we are expecting more easing from Sweden and Norway, that is where most central banks are leaning right now. There is no real rush to move ahead with rate hikes.”

Worryingly for policymakers, firms cut prices in January at the steepest rate since mid-2013. Data on Friday showed annual inflation was a record-equalling low of -0.6 per cent in January across the 19 nations using the euro.