Alexa

High oil and dairy prices push euro inflation to January high, jobless rate low

High oil and dairy prices push euro inflation to January high, jobless rate low

Higher prices for transport fuel, heating oil and dairy products pushed yearly inflation in the euro area to record levels in January, the EU statistical agency Eurostat said Friday, as unemployment stayed at a low of 7.1 percent.
Businesses are so far not cutting jobs but companies have mixed views about rocky times ahead, with an EU confidence survey slipping again in February as industry and the services sector were more downbeat while retailers saw sales picking up.
The European Commission last week cut its growth forecast for the euro currency zone this year to 1.8 percent, saying the global economy looked "unusually uncertain" but the slowdown could be short-lived if the U.S. recovers later this year.
Eurostat confirmed an earlier estimate of 3.2 percent inflation last month in the 15 nations that share the euro, the fastest price increases in 15 years and well above the European Central Bank's guideline of just under 2 percent.
The ECB has held back from its usual path of damping inflation by hiking borrowing costs over concerns that the euro economy is slowing and banks are still reluctant to lend money in the wake of last summer's credit crisis.
Unlike the U.S. Federal Reserve or the Bank of England, it has not cut rates, leaving its key interest rate unchanged at 4 percent since last summer.
EU economic weather vanes painted a mixed picture for the economy on Friday with Eurostat figures showing that worries about a slowing global economy are not so far forcing job losses.
Unemployment in the euro currency zone was 7.1 percent in January, the lowest points since the currency was launched. The rate was the same as December, Eurostat said, revising downward its earlier estimate of 7.2 percent.
A European Commission survey of business and consumer confidence fell to 100.1 in the euro area, falling back to levels not seen since the start of 2006, before a recent growth spurt saw businesses expand on strong exports abroad and more spending at home.
The services sector slipped markedly in February as managers saw demand drop in the months ahead. Industry and construction were also downbeat but confidence levels are still above a long-term average.
Retailers, however, were more positive about current and expected sales _ with German, Italian and British confidence surging while Spanish shops far more pessimistic.
Consumer confidence in the euro area was unchanged at a three-year low.
Another survey, the EU's business climate indicator, also continued to decline in February to 0.72 as industry managers cut their own forecast for output in the months ahead and flattened expectations for future orders.


Updated : 2020-12-04 11:01 GMT+08:00