Eurozone unemployment rises to record levels

Unemployment in the eurozone has reached a record high, with 17.4 million people out of work across the single currency, according to the latest official figures.

That translates into an average unemployment rate across the euro-using countries of 10.9 per cent in March, up from 10.8 per cent in February.

But that headline rate, unveiled by Eurostat yesterday, disguises large divergences between member states.

The increase was driven by a sharp rise in unemployment in Spain where it rose from 23.8 per cent to 24.1 per cent. Italy, which has also fallen into recession, saw its unemployment rate rise from 9.6 per cent to 9.8 per cent.

Yet it is a very different picture in the eurozone's largest economy, Germany, where the jobless rate was unchanged in March at 5.6 per cent.

There was more bad news for eurozone nations, with the latest survey of manufacturing purchasing managers across the single currency showing another decline from 47.7 in March to 45.9 in April. Any figure below 50 indicates a contraction in activity.

The European Central Bank (ECB) holds its monthly governing council meeting in Barcelona today. Though it is expected to keep interest rates on hold at 1 per cent, the press conference will be closely watched to see if the ECB president, Mario Draghi, signals any further monetary easing to come.

* Credit rating agency Standard & Poor's upgraded Greece to CCC yesterday. It said the move reflected the improved sustainability of Athens' debts, after it restructured public borrowing in February by imposing an effective 55 per cent haircut on bondholders.