- Martin van Vliet, economist at ING Bank NV
The number of unemployed people in the 17-nation Euro area soared to a fresh high in the beginning of 2013, adding to concerns that the currency bloc's recession extended into the first quarter. According to the European Union's statistics office, the overall jobless rate stood at 12% in February, while the January figure was revised up to the same level from 11.9% estimated earlier. A report also showed that there were 33,000 people more out of work in February than a month ago, while the total number of unemployed people reached 19.1 million. As the unemployment rate reached the highest since the data series started in 1995, the Eurozone economy is expected to contract for the sixth consecutive quarter. The European Central Bank has held its key rate at 0.75% since July and now forecasts the economy will shrink 0.5% in 2013.
"An end to the Eurozone's labour-market downturn is not yet in sight," Martin van Vliet, economist at ING Bank NV, said in a research note. "We cannot fully rule out a surprise rate cut or new unconventional support on Thursday."
"The ECB is reluctant to use the remaining room to maneuver. Cuts in the main policy rate are being kept for an even rainier day," David Mackie, an economist at JP Morgan, wrote in a research note. "We believe that the ECB should respond to this macro outlook."
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