Eurozone on track, says Rehn

GROWTH in the Eurozone will hit 1.6 per cent in 2011, higher than previous forecasts of 1.5 per cent, the EU’s economics chief said yesterday.

However, commissioner Olli Rehn warned that oil prices will average $100 (£61) this year, on the day that consumer price inflation in the euro area was announced at 2.4 per cent in February.

Inflation was up from a downwardly revised 2.3 per cent in January.

The ECB’s latest interest rate decision is announced tomorrow.

Meanwhile, manufacturing surveys across the euro area were yesterday confirmed at 59 in the Markit purchasing managers’ index (PMI), the fastest rate of growth since June 2000.

And cost inflation peaked at record highs in all single currency countries apart from Ireland and Greece, the survey revealed. Across the whole Eurozone, inflationary pressures surged as both output and input prices rose at a record pace.

Factory growth in the region was led by its largest economy, Germany, along with Austria and the Netherlands. In all three nations, manufacturing PMI showed record levels of growth.

Unemployment also fell in Germany in February, from 7.4 per cent to 7.3 per cent.

The fall reflected positive labour market news for the Eurozone as a whole, where the unemployment rate declined to 9.9 per cent in January, from 10 per cent at the end of last year.