European Central Bank president Mario Draghi's decision to stay away from Jackson Hole to work on eurozone rescue plans looked increasingly justified yesterday as record unemployment underlined the urgency of the region's debt crisis.
Dole queues across the 17 nations using the euro stretched past 18 million for the first time as the unemployment rate hit a record 11.3 per cent in July. The jobs blow was matched by equally poor news on inflation, as the cost of living in the eurozone hit a surprise 2.6 per cent in August – well above the European Central Bank's target of just below 2 per cent.
This reduces the likelihood of a rate cut next week despite the eurozone heading into recession, although investors expect Mr Draghi to unveil plans to buy up the sovereign debt of struggling southern states.
German unemployment was static at 5.5 per cent – unchanged since April – but Spain rose again to hit a painful 25.1 per cent. Dole queues among Spanish under-25s also surged again to 52.9 per cent, compared with just 8 per cent in the eurozone's biggest economy.
Peter Vanden Haute, economist at ING Bank, said: "The divergence between the core and the periphery remains striking... for the stability of the eurozone, this is an unsustainable development."Reuse content