EURO-ZONE industrial production fell by a record amount in December, indicating a deepening recession and adding to the case for another European Central Bank (ECB) rate cut.
Industrial production in the 15 countries using the euro in December fell 2.6 per cent month-on-month and 12 per cent year-on-year, the steepest monthly and annual drops since records started in 1990, the European Union statistics office said.
Economists polled by Reuters had expected a 2.1 per cent monthly drop and 8.9 per cent annual fall. Eurostat also revised output data for November to a monthly contraction of 2.2 per cent from the previously reported 1.6 per cent and to an annual fall of 8.4 per cent from 7.7 per cent.
“The economy took a breathtaking turn for the worse at the end of last year in the aftermath of the near collapse of the financial system,” said Nick Kounis, economist at Fortis.
“The figures add to the already strong case for the ECB to do more, not just in terms of cutting rates further in March, but also in terms of stepping up its efforts to ease financial conditions by an aggressive expansion of its balance sheet.”
The ECB has signalled it may reduce rates again in March.
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