Euro zone economic sentiment hit record lows in January while inflation expectations fell, data showed, boosting the case for more European Central Bank rate cuts as the economy sinks deeper into recession.
The European Commission said economic sentiment in the 16 countries using the euro fell to 68.9 points - the lowest since records began in 1985 - from an upwardly revised 70.4 in December.
Economists polled by Reuters had expected a fall to 65.8.
The numbers are likely to reinforce expectations of further ECB interest rate cuts, especially as data showed that inflation expectations among households fell again to 5 points from 7 in December and among firms to -11 - a new record low - from -7.
The bank has cut interest rates by 225 basis points to 2 per cent since October as falling oil prices halved the rate of inflation in the same period and data pointed to a first annual contraction of the economy this year of almost 2 per cent.
Reuters