Eurozone unemployment at record high as inflation drops
- 30 April 2013
- From the section Business
Unemployment in the eurozone has surged to a fresh record high, while inflation has fallen to a three-year low, boosting expectations that the European Central Bank will cut interest rates.
Unemployment in the 17 countries using the euro hit 12.1% in March, up from February's 12%, according to official figures from Eurostat.
In total, 19.2m people are now out of work in the region.
Separate Eurostat data showed that inflation slowed to 1.2% in April.
Greece and Spain recorded the highest unemployment rates in the eurozone, at 27.2% and 26.7% respectively, while Austria, at 4.7%, and Germany, at 5.4%, had the lowest rates.
Youth employment, defined as those under 25, hit 3.6 million in the eurozone. In Greece, 59.1% of under-25s were unemployed as of the end of January, while in Spain, 55.9% were unemployed.
Meanwhile, separate data from Eurostat showed consumer prices rose 1.2% in the year to April across the eurozone, a marked slowdown from March's 1.7% rise.
The slowdown, driven by a sharp fall in energy prices, means inflation in the eurozone is now at its lowest level since February 2010.
The figure was much lower than the fall to 1.6% that analysts had expected.
Interest rate cut
Economists said that the disappointing data had increased the likelihood of the European Central Bank announcing a cut in interest rates when it reveals its decision this Thursday.
``If an ECB rate cut on Thursday didn't look nailed-on before, it certainly does now,'' said Craig Erlam, market analyst at Alpari.
Marie Diron, senior economic adviser at Ernst & Young, added: ``It now seems pretty certain that it will lower interest rates."
A Reuters survey last week found that a majority of economists expect the European Central Bank (ECB) to cut the bank's main refinancing rate by 25 basis points to a record low of 0.5%.
If the ECB was to cut rates, it would mark its first reduction since July last year.