Eurozone unemployment rate hits record 11.9% in January 2013

Eurozone unemployment rate rose to a new record high in January, official figures show.

The jobless rate in the 17 countries that use the euro rose to 11.9% in January from 11.8% in December, the statistics agency Eurostat said.

The highest rate was 27% in Greece, although the most recent figure there was from November, while the lowest rate was 4.9% in Austria.

Eurostat also said eurozone inflation had fallen to 1.8% in February.

The inflation figure was the lowest for two years, putting it in line with the European Central Bank’s (ECB) inflation target of below, but close to 2%.

Analysts said that the high unemployment and low figure for inflation would make it more likely that the ECB would cut its interest rates later in the year from the current rate of 0.75%.

“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 debt question has to be resolved.”

The highest unemployment rates among countries that have reported their January figures were 26.2% in Spain and 17.6% in Portugal.

Unemployment in the 27 countries that make up the European Union rose to 10.8% in January from 10.7% the previous month.