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Inflation in the eurozone eased slightly to 2.1 percent in December, edging closer to the European Central Bank's 2.0 percent tolerance threshold, data from Eurostat showed on Monday.

The inflation estimate from the European Union's statistics office was broadly in line with a forecast of economists surveyed by Reuters which saw an annual rise of 2.05 percent.

In November inflation in the 12-nation eurozone rose to 2.2 percent from 2.0 percent in October due to higher food and tobacco prices.

The decline in inflation is likely to be welcomed by the ECB whose governing council meets on Thursday.

The ECB is expected to keep interest rates steady at a record low of 2.0 percent amid low inflation and tepid economic growth.

Eurostat also said new orders for manufacturing industry in the eurozone picked up by 1.6 percent in October for an annual rise of 1.7 percent, compared with a September monthly rise of 2.0 percent and a year-on-year rise of 2.6 percent.

The monthly change in prices and details of December inflation will be released by Eurostat on January 21, according to its preliminary release schedule.

Copyright Reuters, 2004


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