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Euro zone output tumbles in Nov as recession bites

Published 01/14/2009, 05:00 AM
Updated 01/14/2009, 05:08 AM
TGT
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BRUSSELS, Jan 14 (Reuters) - Euro zone industrial production plunged for the seventh month running in November, signalling a worsening recession and strengthening market views the European Central Bank will cut interest rates deeply on Thursday.

Industrial output in the 15 countries using the euro in November fell 1.6 percent on the month and 7.7 percent year-on-year, the European Union statistics office said on Wednesday.

Economists polled by Reuters had expected a 1.8 percent monthly fall and a 6.0 percent year-on-year decline.

Eurostat also revised downwards its October output data to a 1.6 percent monthly contraction from the previously reported 1.2 percent drop and a 5.7 percent year-on-year fall from 5.3 percent.

The data showed industrial production was pulled down by plunging output of consumer durables and intermediate goods.

The data is in line with a steep drop in investment that helped drag the euro zone into its first-ever recession in the second and third quarters of 2008 and falling consumer confidence as concerns about jobs rise among households.

It is likely to bolster arguments that the ECB should make a deep cut in interest rates on Thursday from the current 2.5 percent to help revive the economy as inflation has already fallen below the bank's target and is seen dropping further. (Reporting by Jan Strupczewski, editing by Dale Hudson)

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