January 31, 2017 / 10:20 AM / 3 years ago

Euro zone inflation jumps, growth accelerates, unemployment falls

BRUSSELS, Jan 31 (Reuters) - Euro zone inflation jumped more than expected in January on a surge in energy prices as economic growth accelerated and unemployment fell to its lowest level in more than seven years, data from the European Statistics office showed on Tuesday.

Inflation in the 19 countries sharing the euro accelerated to 1.8 percent year-on-year this month, Eurostat estimated, up from 1.1 percent in December, reaching the European Central Bank’s medium-term target of below, but close to 2 percent.

It was the highest rate since February 2013.

But core inflation, which excludes volatile prices of energy and unprocessed food and which the ECB looks to in its policy decisions, was stable at 0.9 percent year-on-year in January, suggesting no immediate change to the central bank’s bond buying programme.

Energy prices jumped 8.1 percent year-on-year in January after a 2.6 percent increase in December and unprocessed food was 3.3 percent more expensive than a year earlier.

Separately, Eurostat said euro zone gross domestic product rose 0.5 percent quarter-on-quarter in the last three months of 2016, as expected by markets, for a 1.8 percent year-on-year rise.

In the whole of 2016, euro zone GDP rose 1.7 percent.

The stronger economic growth also helped bring down euro zone unemployment to 9.6 percent, the lowest rate since May 2009, when the Greek debt crisis had not hit the bloc yet. (Reporting By Jan Strupczewski, Francesco Guarascio and Philip Blenkinsop)

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