Euro zone inflation stabilises in 'danger zone', unemployment stays high

Friday 28 February 2014 17.51
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Euro zone inflation stays at 0.8% in February
Euro zone inflation stays at 0.8% in February
Euro zone unemployment rate had held at 12% since hitting a record high of 12.1% in September
Euro zone unemployment rate had held at 12% since hitting a record high of 12.1% in September

Euro zone inflation stabilised in what the European Central Bank has called the "danger zone" in February, data showed today, while unemployment remained stuck near record highs ahead of an ECB policy meeting next week.

The European Union's statistics office Eurostat estimated that consumer prices in the 18 countries sharing the euro rose 0.8% year-on-year this month. 

That was the same rate as in January and December, after readings of 0.9% in November and 0.7% in October.

ECB President Mario Draghi has warned of the risk of inflation getting stuck in a danger zone below 1%, but said again this week that there was clearly no deflation.

February's inflation rate was stable because lower energy costs were offset by more expensive industrial goods and services.

But so-called core inflation, which excludes the most volatile components like energy, food, alcohol and tobacco prices, continued to inch higher, to 1% year-on-year from 0.8% in January and 0.7% in December.

Price pressures in the euro zone economy are low because unemployment remains stuck close to record highs. Eurostat said today that 12% of the bloc's workforce was unemployed in January, unchanged from a month before.

In absolute terms, the number of people without jobs edged higher to 19,175,000 from 19,158,000 in December, it said.

The modest economic recovery in the euro zone has yet to produce any sharp improvement in employment, the data showed.

The January outcome means the jobless rate has been flat at 12% since hitting a record 12.1% in September.

This suggests the worst may be over for an indicator which usually lags several months behind the economy.