Brussels - Inflation in the eurozone has fallen into negative territory, the European Union's statistical office estimated on Tuesday, while unemployment continued to climb.

The inflation rate in the Eurozone has decreased,

The annual inflation rate reached -0.2 per cent in August in the 19 countries that use the euro, Eurostat said. In July, it stood at 0.4 per cent, having picked up slightly after nearing zero in spring.

The deflation - not seen in the eurozone since 2016 - was mainly driven by falling energy prices, which tumbled by close to 8 per cent, Eurostat said in its first estimate for August. The pandemic has curbed demand for fuel.

Annual inflation is measured by comparing the price levels between the current month and the same month last year.

The figures are well below the the European Central Bank's inflation target of just under 2 per cent - a rate deemed to strike a balance between growth and stability.

 The Euro and the Eurozone

while the unemployment rate has increased

Meanwhile, the average rate of joblessness in the eurozone rose to 7.9 per cent in July, the Luxembourg-based office estimated.

This was an increase of 0.2 percentage points from June, despite the lifting of some Covid-19 containment measures that saw many sectors of the EU economy grind to a halt.

Across the whole 27-country EU the rate of unemployment was 7.2 per cent, the July figures released by Eurostat showed, up from 7.1 per cent the previous month.

Eurostat estimates that 15.2 million people in the EU, including 12.8 million in the euro area, were out of work in July.

Women in the eurozone were hit slightly harder on the labour market in July, the Eurostat figures show.