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Eurozone inflation rose to zero per cent
and out of negative territory in Octo-
ber, official data showed Friday, but
the level is still low and will press the
European Central Bank to pump up
ECB head Mario Draghi hinted heavily this month
that the central bank will boost its contested bond-
buying programme given low inflation levels across
the 19 countries that share the euro.
The step up to zero per cent from negative 0.1 per
cent a month earlier will do little to reverse Draghi s
course, analysts said.
The EU s Eurostat statistics agency also said euro-
zone unemployment dropped to 10.8 per cent in Sep-
tember, the lowest level since January 2012.
Across the EU s 28 members, the rate stood at 9.3
per cent, it said.
"Although today s inflation and unemployment
data for the eurozone revealed small improvements,
they are still very weak by past standards, suggesting
that the ECB cannot afford to delay increasing its
policy support much longer," said Jessica Hinds, Euro-
pean economist at Capital Economics.
In March, the ECB launched a more than one-
trillion-euro stimulus plan running through to Sep-
tember next year in order to get inflation closer to
its 2.0 per cent target.
Despite that, the ECB s chief economist this week
told AFP that there is a growing risk that inflation
in the eurozone will not return to levels conducive
to healthy economic growth, thus opening the door
to more central bank action.
"There are no taboos," Peter Praet said, on the
measures needed to push inflation back to more suit-
The exit from deflation came as the steep fall in
energy prices, led by oil, slowed in October to 8.7
percent annually instead of 8.9 per cent the previous
month, the data showed.
ING analyst Teunis Brosens said the inflation data
made the "inflation anxieties" expressed by the ECB
last week seem "odd".
"It is hard to escape the notion that inflation was
merely an excuse to talk down the euro exchange
rate last week," Brosens said, referring to the euro s
strong trading against the US dollar that hurts Europe s
Unemployment in the eurozone has fallen steadily
from the 12.1 per cent peak reached in 2013, but
divergences across the monetary bloc remain wide.
Crisis-hit Greece again posted the highest rate of
unemployment in the eurozone at 25.0 per cent in
July, the latest data available.
Just weeks ahead of elections, Spain posted a still
high 21.6 percent, though this was down from 24.0
per cent a year ago.
Youth unemployment in Spain stood at 46.7 per
cent, but steeply lower than 53.7 per cent a year ear-
lier.In Italy, the rate was 11.8 per cent last month, down
from 11.9 percent in August.
Even with the signs of improvement in Italy, "the
path toward levels of employment close to the rest
of Europe seems to be an extremely long and difficult
one," Riccardo Padovani, head of research institute
Svimez told Bloomberg.
French unemployment crept lower to 10.7 per cent
from a month earlier but was still up from 10.4 per
cent a year ago.
In Germany, unemployment remained at historically
low level of 4.5 per cent, as measured by Eurostat,
down from 5.0 per cent a year earlier. AFP
Eurozone exits deflation
but pressure for
ECB boost persists
In this Tuesday, February 24, 2015 file photo, Mario
Draghi, the president of the European Central Bank,
stands next to a copy of a 20 euro banknote in
Frankfurt, Germany. On Thursday, October 22, 2015,
Draghi hinted that the bank may expand its
monetary stimulus at its December meeting in order
to shore up the ailing recovery in the 19-country
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