Further gloom for Eurozone as unemployment rises

Unemployment across the Eurozone climbed to 10.8 per cent in February, the highest level since the single currency was established in 1999, latest figures show.

The jobless rate has edged up from 10.7 per cent in January, pushing the total number of people out of work to more than 17 million, according to EU statistics office Eurostat.

Spain has the highest rate across the zone at 23.6 per cent, up from 23.3 per cent in January, the report reveals, with more than half of under 25s now out of work.

Joblessness in Greece rose by more than one per cent to 21 per cent in December, with youth unemployment hitting 50.4 per cent. There were no February figures available.

By comparison, in the north of Europe, unemployment in Germany, the Netherlands and Finland continued to fall, Eurostat said.

A separate report released today shows that manufacturing activity in the Eurozone slumped in February to 47.7, the eighth consecutive month that the Purchasing Manager’s Index has remained below 50, indicating a contraction.

Dr Howard Archer, chief UK and European economist at IHS Global Insight, said: “It looks odds-on that Eurozone GDP contracted again in the first quarter of 2012, thereby moving into recession.

“And the prospects for the second quarter of 2012 currently hardly look rosy.”

He added that he expects the Eurozone unemployment rate to top 11 per cent this year.

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