Eurozone Jobless Rate Hits New High in Oct

The eurozone's unemployment rate hit a new record high in October, while consumer price rises slowed sharply.

The unemployment rate continued its steady rise, reaching 11.7% in October, up from 11.6% the month before and 10.4% a year ago.

Inflation fell from 2.5% to 2.2% in November.

A further 173,000 were out of work across the single currency area, bringing the total to 18.7 million.

The respective fortunes of northern and southern Europe diverged further. In Spain, the jobless rate rose to 26.2% from 25.8% the previous month, and in Italy it rose to 11.1% from 10.8%.

In contrast, unemployment in Germany held steady at 5.4% of the labour force, while in Austria it fell from 4.4% to just 4.3%.

"The real problem is that we have a two-speed Europe," economist Alberto Gallo of Royal Bank of Scotland told the BBC. "The biggest increase in unemployment is being driven by Italy and Spain.

"It is the same as you are seeing in financial markets," he explained. "The periphery [Spain and Italy] is the area where the banks are the least capitalised and need the most help, and the loan rates are the highest."

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