Inflation in the eurozone tumbled to its lowest level in over a year last month, giving the ECB more scope to cut interest rates aggressively next week.The Eurostat European Union statistics office said today that consumer price inflation dropped 1.1 percentage points last month to stand at 2.1%. This is the lowest level since September 2007 and suggests that inflation is bound to fall back below the European Central Bank's target rate of 2% in December. It added that unemployment rose to 7.7% last month, from an upwardly revised 7.6% in September. The biggest increase in unemployment was in Spain, where the jobless rate rose to 12.8%, from 12.1% in September.Economists now expect the European Central Bank to slash rates by at least half a percentage point next week, which would leave rates standing at 2.75%. The ECB has so far cut rates twice by 50 basis points in October and November.
Inflation in the eurozone tumbled to its lowest level in over a year last month, giving the ECB more scope to cut interest rates aggressively next week.
The Eurostat European Union statistics office said today that consumer price inflation dropped 1.1 percentage points last month to stand at 2.1%. This is the lowest level since September 2007 and suggests that inflation is bound to fall back below the European Central Bank's target rate of 2% in December.
It added that unemployment rose to 7.7% last month, from an upwardly revised 7.6% in September. The biggest increase in unemployment was in Spain, where the jobless rate rose to 12.8%, from 12.1% in September.
Economists now expect the European Central Bank to slash rates by at least half a percentage point next week, which would leave rates standing at 2.75%. The ECB has so far cut rates twice by 50 basis points in October and November.
