- Sarah Hewin from Standard Chartered
The rate of unemployment in the 17-nation currency bloc soared to a fresh record in January, indicating that the recession is engulfing more and more businesses, figures from the EU's statistics office, Eurostat, showed Friday. The overall jobless rate climbed to 11.9% in January, up from 11.8% in December, as additional 200,000 people joined jobless queues across the region. The highest levels of joblessness were recorded in bailed-out Greece and Spain, with 27% and 26.2%, respectively. Within the total of 19 million unemployed people in the Eurozone, around 3.6 million people were under the age of 25. The latest data are pointing at the possible rate cut by the ECB, as constantly rising unemployment and weak domestic demand are adding to concerns that the economy is struggling to gain pace.
"All the data is supporting a rate cut, which we see in the second quarter," said Sarah Hewin from Standard Chartered. "They could move as early as next week, but there's an element of the ECB wanting to keep its powder dry as we enter an uncertain political situation with Italy and the Cypriot."
"Even if the Eurozone economy exits from recession in due course, the labour market is likely to remain in recession for most if not all of this year," Martin van Vliet at ING Bank said.
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