German unemployment rose again in December to hit a four and a half year high, the Labour Office said today. The number of people out of work rose a seasonally adjusted 28,000 in December from November, remaining above the four million mark and pushing the unemployment rate to 8.5pc from 8.4pc. The Labour Office also said that average number of jobless in Germany in 2002 was 4.06 million, up more than 200,000 from 2001, the Labour Office said. The government has held to a forecast for German GDP growth of 1.5pc this year, despite the fact that the country's six leading economic institutes have all slashed their outlook for growth to no more than 1pc. "We need more rate cuts [in Europe], but we're not going to see them today. Germany's situation alone merits rate cuts, but the ECB won't want to cut rates at successive meetings," said Niall Dunne, economist at Ulster Bank. The central bank holds its first meeting of the year today, having slashed rates by 50 basis points to 2.75pc last month. Commenting on the governing council meeting, analysts also point to the fact that the ECB has never cut rates below 2.50pc, so the next cut, when it comes, is likely to be only 25 basis points. //www.fxcentre.com