Spain leads unemployment rate in eurozone with massive 23.3 percent

Unemployment in the 17-country eurozone unexpectedly spiked to 10.7 percent in January, its highest rate since the euro was established in 1999, while inflation pushed beyond the European Central Bank's target, official figures showed Thursday.

The increase reported by Eurostat, the EU's statistics office, was much more than expected. The consensus in the markets was for the rate to remain unchanged at December's previously reported rate of 10.4 percent. Instead, December's rate was instead revised upward to 10.6 percent.

Europe's unemployment rate has been steadily ticking up all year as the wider economy wanes in the face of a protracted debt crisis that's meant widespread austerity measures being pursued across the single currency zone. Spain had the highest unemployment rate in the eurozone at a massive 23.3 percent, while Greece's had edged up to 19.9 percent in December, the last available figures for the debt-ridden country.

The statistics office also revealed that inflation across the eurozone ticked up in February to 2.7 percent from 2.6 percent the previous month. Again the increase was unexpected, the markets had been pricing in no change from January, and takes inflation further above the European Central Bank's target of keeping price rises at just below 2 percent.

The ECB holds its monthly policy meeting next week and all expectations are that it will keep its benchmark rate unchanged at the record low of 1 percent, especially after its massive injection of cash into the banking system on Wednesday.

The euro was little affected by the news and was trading flat at $1.3335.