Official EU figures have confirmed that the annual rate of inflation in the euro zone dropped to 1.1% in January.
The fall brought the rate to its lowest point since July 1999. It was down sharply from the 1.6% that the Eurostat data agency recorded in December.
The fall confirmed an earlier estimate and brought inflation to well below the European Central Bank's comfort zone of close to but less than 2%. After hitting a record high of 4% in June and July 2008, euro zone inflation has fallen sharply as oil and other commodity prices have collapsed in the face of a deep economic downturn.
The drop in inflation has paved the way for a series of interest rate cuts by the European Central Bank, which is likely to lower its key interest rate by another half a percentage point at its meeting next month.
Separate figures showed that the euro zone unemployment rate rose to 8.2% in January, the highest level in more than two years. This was up from 8.1% in December. The January figure marked the 10th consecutive monthly increase in unemployment.
