Eurozone sees inflation ease but jobless rise

City A.M. Reporter
EUROZONE inflation eased as expected in October thanks to slower growth of energy prices, but unemployment rose to new record highs in September, data from the statistics office Eurostat showed yesterday.

Eurostat estimated consumer inflation in the 17 countries sharing the euro was 2.5 per cent year-on-year, down from 2.6 per cent in September, though still above the European Central Bank target of below, but close to two per cent.

Upward pressure came mainly from more expensive energy, the prices of which increased 7.8 per cent year-on-year in October, but more slowly than in September, when they were up 9.1 per cent year-on-year.

Eurostat said 18.49m people were without jobs in the euro area, up by 146,000 from the month before.

The highest unemployment rate was in Spain, where the number of jobless rose to 25.8 per cent of the workforce in September from 25.5 per cent the month before.

Meanwhile the ECB said it had ended its second covered bond purchase programme with less than half the €40bn it had set aside for it spent, and added it can be reactivated if needed. The central bank also said banks had made it harder for firms to borrow in the third quarter and expects them to toughen loan requirements further, even though their own funding constraints have eased.

The ECB said that while banks see lower demand and tighter standards, they also reported an improvement in access to retail and wholesale funding across all funding categories in the third quarter.