EU: Eurozone recession to continue into 2014.

The European Commission has cut its outlook, predicting the economy will contract by 0.3% this year after shrinking by 0.6% in 2012 and then return to growth of 1.4% in 2014. The EC had forecast the economy would expand 0.1% in 2013, but tight lending conditions and record unemployment - which is expected to peak at 12.2% - have dashed any hopes of a recovery this year. With inflation seen falling to 1.8%, pressure could rise on the ECB to lower rates.