Euro zone annual inflation was unchanged in August while the number of people without jobs grew, official figures showed this morning. The figures are likely to add to expectations that the next European Central Bank interest rate move could be a cut rather than a rise.
EU statistics office Eurostat said the annual inflation rate in the 17 countries using the euro was 2.5% in August, the same as in July. The ECB wants to keep inflation below but close to 2%, and the bank had raised its rates twice this year - and signalled further increases - in order to combat inflation. But on Monday, ECB President Jean-Claude Trichet said the bank was reviewing the risks to price stability, suggesting it could tone down its view on inflationary pressures.
Separate Eurostat figures showed that the euro zone's unemployment rate was stuck at 10% in July. Analysts say high unemployment is likely to slow wage growth and help keep inflation down.
Eurostat also raised its June estimate to 10% instead of 9.9%. Unemployment has now hit 10% for three months running in the euro zone. The July figure was slightly worse than the 9.9% rate forecast by analysts.
Eurostat estimated that nearly 15.8 million men and women were looking for jobs in the euro zone in July, an increase of 61,000 people from the previous month. Spain recorded the worst rate again at 21.2% while Austria had the lowest figure at 3.7%.
In the wider 27-nation EU, which includes non-euro members Britain and Poland, the unemployment rate remained steady at 9.5% in July, the same figure as June. Some 22.71 million people were unemployed in July across the EU, 18,000 more than in June.