Further euro interest rate cuts moved a step closer again yesterday as figures emerged that German industrial output fell by 2.3 per cent in November, adding to a recent string of downbeat signs from Europe's largest economy.

Meanwhile, figures in Paris showed that French consumer prices were stable in December, showing the lowest 12-month rise of 0.3 per cent since 1985. The underlying inflation rate, excluding volatile items such as fresh food and energy, was up 1.1 per cent annually.

In Germany, the month-on-month decline in industrial output was much bigger than expected. It was seen across both the manufacturing and construction sectors and was felt equally in the east and west of the country.