EURO Area Showed Inflation Unexpectedly Climbed to 3.0%

After approval of the German vote to extend the European Financial Stability Fund (EFSF), the focus is again on the fundamentals of the euro area to see how long the slowdown will continue.

The data released today by the euro zone showed inflation unexpectedly rose to 3.0%, the fastest in almost three years, adding more pressure on ECB officials before the rate decision ahead.

After the publication of the report, the euro continued its descent to play at least on the level 1.3485 from 1.3596 day.

CPI annual preliminary estimation, the main gauge of inflation in the euro area increased from 2.5% after stabilizing at that level in recent months.

The rate rose despite the decline in oil prices in September in which oil prices currently traded around $ 82.30 compared to $ 88.80 early.

In fact, the acceleration of prices means that consumer purchasing power will decrease, increasing the pressure on the economy is already suffering a slowdown, due to austerity measures taken by governments to cut the budget deficit.

The ECB raised interest rates in April and July by 50 basis points to contain inflation, even with the recent slowdown in the growth path expectations were in favor of seeing a cut in interest rates, especially as some officials ECB refers to the interest rate cut is possible action by the bank.

The ECB said in September that inflation may average 2. 6% this year and 1.7% next year.

On the other hand, the unemployment report for August showed that the rate remained at10.0%, where the number of unemployed fell by 38,000 to a total of 15.74 million.

Now, officials in the euro area face a daunting challenge to boost the slow growth and contain the debt crisis which affected the confidence in the euro area and Germany, according to reports released this week.

Yesterday, Germany ratified a plan to seize the EFSF to guarantee future loans up to € 211 billion instead of € 123 billion earlier after Merkel had achieved an overwhelming majority of 523 against 85 against and 3 abstentions.

Many economies in the euro-zone expansion plan ratified the exception of Slovakia, and noted that today Austria is expected to increase its share of € 21.64 billion from € 12.24 billion when the plan is approved Parliament.