Low inflation, high jobless rate show euro crisis impact

Inflation fell in the eurozone in February and joblessness rose to an all-time high, highlighting the impact of the bloc’s debt crisis. Annual inflation in the 17 countries sharing the euro was 1.8 per cent in February, the EU’s statistics office Eurostat said yesterday, around the ECB’s target of below but close to two per cent, and by more than expected. January’s unemployment rate meanwhile rose to 11.9 per cent in the bloc, up from 11.8 in December, with another 201,000 people out of work, Eurostat said separately. The sombre economic situation will likely weigh on the ECB’s Governing Council when it meets on March 7, and while only a minority of economists see any early move to cut the bank’s benchmark rate below the current 0.75 per cent, consumer prices are no longer an issue. “Inflation is just not a concern, it is not a reason why policymakers would hesit-ate to cut interest rates,” said Sarah Hewin, head of European research at 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 to be resolved.” Economists polled...