Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Euro-Area Inflation Steady; Unemployment Hits 13-Year High

Euro-Area Inflation Steady; Unemployment Hits 13-Year High
The European Central Bank earlier this month unexpectedly cut interest rates as the region’s worsening fiscal crisis pushed the economy toward its second recession in as many years. Photographer: Hannelore Foerster/Bloomberg

Nov. 30 (Bloomberg) -- European inflation remained at a three-year high and unemployment increased to the highest in more than 13 years, undermining an economy already hit by a worsening fiscal crisis.

The inflation rate in the 17-nation euro area held at 3 percent in November, the European Union’s statistics office in Luxembourg said in an initial estimate today. The region’s unemployment rate rose to 10.3 percent in October from 10.2 percent in the previous month, according to a separate report. That’s the highest since June 1998, before the euro was introduced, according to Eurostat.

The European Central Bank earlier this month unexpectedly cut interest rates as the region’s worsening fiscal crisis pushed the economy toward its second recession in as many years. While the euro area is showing signs of a deepening slump and companies including Deutsche Bank AG are cutting jobs, policy makers have rejected calls to counter the turmoil by printing money.

“The very serious possibility of euro zone gross domestic product contraction in the fourth quarter, coupled with recent overall signs that underlying inflationary pressures are easing, provides a compelling case for the ECB to cut interest rates again” next week, said Howard Archer, chief European economist at IHS Global Insight in London. “It’s evident that both businesses and consumers are very worried.”

IMF Role

The euro was little changed after the data were released, trading at $1.3276 at 11:07 a.m. in Brussels.

Economists had forecast euro-region unemployment to hold at 10.2 percent in October, according to the median of 29 estimates in a Bloomberg News survey. In the 27-member European Union, the jobless rate was 9.8 percent last month.

Euro-region finance ministers said at a meeting in Brussels late yesterday that they would seek a greater role for the International Monetary Fund in fighting the worsening debt crisis. European heads of governments meet on Dec. 9.

The European Commission said on Nov. 10 that euro-region inflation may average 2.6 percent this year and 1.7 percent in 2012. It also cut its growth forecasts for this year and next, citing the turmoil among the biggest risks. The ECB, which aims to keep annual gains in consumer prices just below 2 percent, will release its latest estimates on Dec. 8.

Financial Job Losses

With tougher budget cuts eroding consumer spending and global export demand cooling, the economy is showing increasing signs of slowdown. European economic confidence dropped more than economists forecast in November to the lowest in two years, while services and manufacturing output contracted.

About 16.29 million people were unemployed in October in the euro region, up 126,000 from the previous month, today’s report showed. At 22.8 percent, Spain had the highest jobless rate. Austria and Luxembourg had the lowest rates of 4.1 percent and 4.7 percent, respectively.

Job losses in the global financial services industry this year are close to surpassing 200,000 as Citigroup Inc., France’s BNP Paribas SA and Bank of America Corp. eliminate jobs to lower costs. BNP Paribas, France’s largest bank, said on Nov. 16 it will trim about 1,400 positions. Deutsche Bank last month announced 500 job cuts and further writedowns of Greek bond holdings in the wake of the crisis.

Rate Cut

The ECB stepped up bond purchases last week as yields rose across the area. While officials were forced to resume purchases of covered bonds and extend cash provisions to banks, they have pushed back against investors and governments calling them to backstop the currency bloc by boosting bond-market interventions.

ECB Executive Board member Juergen Stark from Germany resigned in September to protest the central bank’s purchases of government bonds and new President Mario Draghi has called on governments to step up efforts to contain the turmoil.

“The ECB will continue to cut interest rates next week,” said Andreas Scheuerle, an economist at Dekabank in Frankfurt. “It finds it easier to lower borrowing costs than pledge large packages on government bonds and may cut the benchmark below 1 percent if the situation continues to worsen.”

The statistics office will release a breakdown of November consumer prices next month. Euro-area core inflation, which excludes volatile costs such as energy, held at 1.6 percent in October from the previous month.

To contact the reporter on this story: Simone Meier in Zurich at

To contact the editor responsible for this story: Craig Stirling at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.