MORNING BID EUROPE-Flirting with deflation

* A daily view from acting EMEA Money and Politics Editor Jeremy Gaunt. The views expressed are his own.

LONDON, Aug 28 (Reuters) - Inflation data today is not likely to cheer up policymakers at the European Central Bank.

Germany is expected to report that prices fell month on month in August by 0.1 percent, leaving a whopping annual rise of 0.1 percent. Further south, data from Spain just out showed prices fell 0.5 percent since last year.

This does not augur well for full euro zone data on Monday, when the flash year-on-year number is expected to be 0.2 percent.

The ECB wants inflation to be just under 2.0 percent, a level it has not had since 2013. The central bank's 60 billion euro a month asset-buying programme has not worked yet to see off deflation fears and with China slowing and commodity prices falling, the ECB is considering whether it needs to spend more and/or spend for longer.

As things stand it is not expected to move at next Thursday's meeting, but another surprise slide in Berlin - the number 1 euro zone economy - following the emphatically negative number from Madrid would certainly rattle a few cages.

In the meantime, there was some good news in the euro zone's neighbour Switzerland. It (Other OTC: ITGL - news) avoided recession by putting in 0.2 percent second quarter growth. An anticipated fall would have put it in recession for the first time since 2009.

The strength of the franc against the euro remains a problem, however - the Swiss National Bank dumped its 1.20 to the euro cap and it is trading around 1.08 to the euro - and industrial orders were very poor.

If the ECB starts printing more money, the euro should fall more. So maybe Switzerland's good news won't last. (editing by John Stonestreet)