Unemployment rises in eurozone, inflation falls
Unemployment in the eurozone has risen to 7.7%, according to figures published by the EU’s statistics office.
The rise represents the highest level for two years and highlights the severity of the economic slowdown.
The lowest unemployment level among the 15 European nations was reported in Spain, where the rate increased from 12.1% to 12.8%. Meanwhile, in France the rate increased from 8% to 8.2%.
Earlier this month, official figures revealed that the eurozone had fallen into recession after the economy contracted by 0.2% in the third quarter. This followed a 0.2% contraction in the previous quarter from April to June.
A country is considered to be in recession when it experiences two consecutive quarters of negative growth.
Meanwhile, figures also from the EU’s statistics office have revealed that inflation in the eurozone has fallen to 2.1% in November, from October’s annual rate of 3.2%.
As a result, it is widely expected by analysts that the European Central Bank will cut interest rates for the eurozone next week.
Many are expecting a 0.5% cut, however some are expecting a more aggressive cut of 0.75% or even 1%. Interest rates in the eurozone currently stand at 3.25%.
In related news, official figures earlier this week revealed that confidence in the eurozone has fallen to its lowest level since August 1993.
An indicator of executive and consumer sentiment fell from 80.0 in October to 74.9 in November, according to the European Commission in Brussels.
This month’s fall was much higher than economists had predicted and takes the index to a 15-year low.
Finally, the European Commission announced an economic stimulus package worth €200 billion euros (£170 billion) on Wednesday.
It is hoped that the package will save millions of jobs in the eurozone area and boost consumer confidence and encourage spending.