Euro zone inflation off 3-year lows, fall in employment deepens

Prices of electricity, fruit and vegetables lifted the Euro zone inflation off its three-year low in May, while the single currency bloc's record high jobless rate showed in its deepening inability to create jobs in the first quarter.

Economic recovery in the Euro area is expected to kick in later this year, but risks to the growth are on the downside as governments continue with painful fiscal consolidation and companies struggle to access credit in banks.

Consumer prices rose by 0.1 per cent on the month in May, the EU statistic agency Eurostat said, putting the annual inflation rate at 1.4 per cent compared to 1.2 per cent in April.

The Euro zone's malaise was clearly visible in a 0.5 per cent drop in employment first three months of the year, Eurostat data showed, reflecting the unemployment rate that reached a new high in April, with 19.4 million people out of work.