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Euro zone inflation jumps

Euro zone inflation jumps
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Inflation in the 17 countries that share the euro unexpectedly rose in September to three percent.

In its first estimate the EU’s statistics agency Eurostat, said it was up from the 2.5 percent annual rate in August.

That followed surprisingly higher inflation in Germany which makes it less likely that there could be an interest rate cut by the European Central Bank next week.

Economists are increasingly of the opinion that the ECB will cut in early 2012, following two rate rises this year.

The Bank changed its tone at its last rates meeting in early September and opened the door to cuts, signalling that it had halted a cycle of interest rate rises begun five months ago.

Other data released on Friday highlighted the extent of Europe’s slowdown.

German retail sales fell at their fastest monthly pace in more than four years in August, tumbling 2.9 percent on the month as fears of the euro zone debt crisis spiralling out of control weighed on consumer sentiment, while French consumer spending was flat over July and August.