Eurozone jobless rate to hit 12.7%

The eurozone unemployment rate will peak at 12.7% at the start of 2014 as the economy contracts by 0.6% this year before making a marginal recovery next year, according to the latest Ernst & Young summer economic forecast.

The bleak outlook for the region is predicated on the negative impact from a weaker international environment which will depress exports. Higher unemployment will dampen growth.

The consultancy firm predicts the eurozone economy will make a slight rebound in 2014 to 0.9% before posting an average growth rate of 1.5% between 2015 to 2017.