INSTANT VIEW 1-Euro zone inflation cools, unemployment at new high
BRUSSELS, March 1 (Reuters) - Consumer inflation eased in the euro zone in February and joblessness rose to an all-time high, highlighting the impact of the bloc's debt crisis and putting pressure on the European Central Bank to consider cutting interest rates to a new low. Annual inflation in the 17 countries sharing the euro was 1.8 percent in February, the EU's statistics office Eurostat said, around the ECB's target of below but close to 2 percent. January's unemployment rate rose to 11.9 percent in the bloc, up from 11.8 in December.
Euro area annual inflation and its components (in pct) Weight Feb 2012 Sep 2012 Oct 2012 Nov 2012 Dec 2012 Jan 2013 Feb 2013 () 2013
All-items HICP 1000.0 2.7 2.6 2.5 2.2 2.2 2.0p 1.8e Food, alcohol & 193.7 3.3 2.9 3.1 3.0 3.2 3.2p 2.7e
Energy 109.6 9.5 9.1 8.0 5.7 5.2 3.9p 4.0e Non-energy 273.6 1.0 1.2 1.1 1.1 1.0 0.8p 0.8e
Services 423.0 1.8 1.7 1.7 1.6 1.8 1.6p 1.6e
Unemployed as percentage of labour force (seasonally adjusted): Jan 2012 Jul 2012 Aug 2012 Sep 2012 Oct 2012 Nov 2012 Dec 2012 Jan 2013
EA17 10.8 11.4 11.5 11.6 11.7 11.8 11.8 11.9 EU27 10.1 10.5 10.5 10.6 10.7 10.7 10.7 10.8
ECONOMISTS' COMMENTS SARAH HEWIN, HEAD OF EUROPEAN RESEARCH, STANDARD CHARTERED "All the data is supporting a rate cut, which we see in the second quarter. Inflation is just not a concern, it is not a reason why policymakers would hesitate to cut interest rates. "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. There could be a relatively fragile situation developing over the coming weeks. "There would be a positive impact from cutting rates, there are loans that are tied to the refi rate. Banks that are holding LTRO finance would benefit and there would be a confidence impact as well."
GREG FUZESI, ECONOMIST AT JPMORGAN CHASE "I don't think the inflation data per se are sort of a swing factor, because pretty much everyone was expecting inflation to fall below 2 percent in the early part of this year and stay there, so this is really just confirming widespread expectations. "What has been more disappointing has been on the growth side with PMI moving down." "The inflation data do obviously help in terms of removing one barrier to a cut, but I don't think the inflation data per se are a big issue at this point."
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(Reporting by Ethan Bilby and Robin Emmott; editing by Rex Merrifield)