BRUSSELS (AP) — Inflation across the 17 European Union countries that use the euro fell to its lowest level in over three years in April, official figures showed Tuesday, in a development that will pile pressure on the European Central Bank to cut its main interest rate.
Eurostat, the EU's statistics office, said consumer prices rose 1.2 percent in the year to April, way down on the 1.7 percent rate recorded in March and markedly below market expectations for a modest decline to 1.6 percent.
The preliminary April rate was the lowest since February 2010. Eurostat indicated that falling energy prices were largely behind the fall as well as lower service sector inflation. A fuller explanation behind the drop will emerge in a more detailed report in May.
However, the fall in inflation could well mean that the ECB cuts its main interest rate from the already all-time low of 0.75 percent at its monthly meeting on Thursday, despite some reservations from some on the rate-setting governing council.
That pressure on the ECB now is even more acute as Eurostat also reported that unemployment in the eurozone rose to another record of 12.1 percent in March from the previous month's 12 percent.
The unemployment statistics mask huge differences across the eurozone and puts the ECB's dilemma in sharp relief.
While Germany, Europe's largest economy, has an unemployment rate of just 5.4 percent, others such as Spain are languishing with a record jobless rate of 26.7 percent. Greece has the highest unemployment rate in the eurozone though its figures are compiled on a different timeline. In January, its jobless rate stood at 27.2 percent.