Europe's labor market remained in the doldrums in December, while the inflation rate ticked back down to the same level that recently triggered an interest rate cut by the European Central Bank . Reports released last week suggested that the central bank will be under pressure to provide more monetary stimulus to keep a nascent recovery alive. The European Central Bank will definitely be under pressure from financial markets and governments to take fresh actions to steer the Eurozone away from excessively low inflation and prolonged stagnation, following last week showed inflation was well below the ECB`s target of a little bit less than 2%. The ECB will have to acknowledge the slow growth in consumer prices after a report released last week showed annual consumer prices in the block grew only 0.7% in January- the lowest inflation reading for the single currency area in nearly four years, stoking fresh fears of a Japanese-style wave of deflation. In October, the Eurozone's inflation rate fell to 0.7%, the first time it had dropped below 1% since February 2010 , prompting the rate cut from the ECB. Mario Draghi , the chief of the ECB, said key interest rates would remain at present or lower levels for an extended period of time, "given the overall subdued outlook for inflation extending into the medium term." Draghi added that the ECB is ready and able to act again if inflation became too high or too low. Unemployment Rate Stays Near Record Highs At 12.0% On the jobs front, unemployment came at 12.0 percent unchanged from the revised figure, beating 12.1 percent expected by analysts. Yet this will be viewed as a positive result as long as we don't see a return to record high levels. Falling inflation in the Eurozone, coming after five years of recession or very slow growth, means that the currency bloc faces risk of deflation. However, Draghi, who has cautioned that the euro crisis will not be over until the labor market begins to recover, has more recently sought to play down the risk of deflation On the other hand, some recent data have painted a more positive picture of the economic outlook, where consumer and business confidence have been relatively strong. Economic confidence increased for a ninth month in January, rising to 100.9 from a revised 100.4 in December. Euro-area's economy is still struggling to grow amid subdued prices and the threat of rising market rates as the U.S. Federal Reserve tapers its monetary stimulus along with still high unemployment at 12 percent. UK At Rudest Financial Health Since 2007 Britain`s economic recovery eased in the final three months of 2013, growing at 0.7 percent in the three months through December- a slight slowdown that could cement Bank of England's (BoE) commitment to keep monetary policy loose to encourage further growth. However, the economy grew 1.9% in 2013 as a whole, its fastest rate of growth since 2007 and likely one of the best performances among developed nations, data showed last week. This comes a week after the International Monetary Fund (IMF) upgraded its outlook for the UK in 2014, while unemployment rate has taken another shock dive to 7.1 percent in November standing 0.1 percent above the central bank's target for considering an interest rate rise.
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