The one chart that shows the ECB's money printing scheme is failing

Despite €800bn of asset purchases by the central bank the inflation rate in the eurozone is still zero.

Mario Draghi launched the ECB's QE in January 2015 (AFP)

Good news: prices are no longer falling in the eurozone.

But don’t break out the champagne.

According to the European number crunchers Eurostat consumer prices across the 19 nation bloc were flat on a year earlier in March. The inflation rate was zero.

This means the eurozone remains very much within the deflationary danger zone.

The European Central Bank has been trying to break the grip of deflation – which can be lethal for economic growth - on the bloc for more than a year now.

To this end the ECB’s president Mario Draghi announced a major programme to buy up eurozone government bonds and company debt in January 2015. The central bank has been buying €60bn of these assets a month in the hope that that flood of money entering the continent’s financial system would lift inflation into positive territory.

The trouble is, as the chart below shows, is that all that money printing doesn’t seem to be working in pushing up prices:

But the ECB is not giving up. In December it announced that it would continue its programme until March 2017 “or beyond”. The programme was originally supposed to end in September 2016. And in March it upped the size of the monthly bond purchases to €80bn.

In other words, the ECB will continue printing money until inflation rises to the central bank’s target of (just below) 2 per cent a year.