LONDON (AFX) - Euro zone economic figures to be released this week are expected to show a further decline in Germany, putting the European Central Bank under renewed pressure to cut interest rates, according to economists.
Data released so far for September suggests the euro zone has been weaker than the US, despite the terrorist attacks on New York and Washington, raising the likelihood of a ECB rate cut of 25 basis points to 3.5 pct.
This week's data, particularly from Germany - Europe's biggest economy - is likely to cement this trend, economists said.
The ECB is under increasing pressure to cut rates again following a raft of disappointing euro zone data and further rate cuts in the US and UK.
Phillip Shaw, an economist at Investec, is one of those predicting a 25 basis point rate cut.
"This unusually aggressive action would be prompted by the clear signs of growing global gloom, including the euro zone, and reinforced by talks at G7," he said. G7 finance ministers and central bankers meet this weekend in Washington.
The key figures this week will be German unemployment and industrial production data. These are expected to be weak, providing a further spur for an interest rate cut, economists said.
German unemployment is expected to have risen in September by around 16,000, but the unemployment rate should stay at 9.3 pct. "With the economy grinding to a halt in the second quarter and set to remain stagnant in the rest of the year, the underlying labour market situation (in Germany) will deteriorate and the jobless total is likely to resume its upward trend," said Royal Bank of Scotland economist Nigel Anderson.
Dresdner Kleinwort Wasserstein economist John Shepperd warned of leaks in the German press the day before the labour figures are released.
German industrial production is expected to rise by around 0.5 pct on a monthly basis but the bounce-back may just be a response to the fact that more people than usual took their summer holidays in July, economists said.
However, economists think the longer-term trend is downwards and that year-on-year industrial production may fall by 2.6 pct. "Manufacturing output in July/August combined would still be down roughly 1 pct against the previous two months, and the trend is towards weaker output," said Anderson.
After digesting the ECB rate decision at its meeting on Thursday, economists will on Friday be eyeing the latest French inflation figures, which are expected to be benign as last year's sharp energy price hikes drop out of the annual comparison. Headline CPI is expected to be 1.5 pct.

Economists' forecasts for euro zone indicators due Oct 9-12
AFX CONSENSUS PREVIOUS
MONDAY OCT 9
No data expected

TUESDAY OCT 10
German Sept unemployment (000) +16 -2
German Sept unemployment rate (pct) 9.3 9.3
German Aug industrial production
month-on-month (pct) +0.5 -1.5
year-on-year (pct) -2.6 -2.8

WEDNESDAY OCT 11
Spanish Aug industrial production
year-on-year (pct) -4.2 -3.7
German Aug current account (bln eur) -4.7 -3.1
German Aug trade balance (bln eur) +4.8 +8.5
German Aug retail
year-on-year (pct) -0.3 +0.3

THURSDAY OCT 12
Eurozone Q2 GDP (1st revision)
month-on-month (pct) +0.1 +0.1
year-on-year (pct) +1.7 +1.7
Spain Sept CPI
month-on-month (pct) +0.1 +0.2
year-on-year (pct) +3.5 +3.7

FRIDAY OCT 13
French Sept CPI
month-on-month (pct) +0.1 0
year-on-year (pct) +1.5 +1.9
French Q2 GDP 1st revision
month-on-month (pct) +0.3 +0.3
year-on-year (pct) +2.3 +2.3