BRUSSELS - INFLATION in the 15 countries sharing the euro plunged in November to a 14-month low of 2.1 per cent as oil prices dropped, according to an estimate by the Eurostat EU data agency on Friday.

The rate, down from 3.2 per cent in October, marked the slowest growth in consumer prices since September 2007 and was lower than economists' forecasts for 2.4 per cent, as polled by Dow Jones Newswires.

Paving the way for deep interest rate cuts, the drop brought inflation within a whisker of the European Central Bank's comfort zone, which it defines as a rate close to but less than 2.0 per cent.

'Pressure is mounting on the ECB to deliver a deeper interest rate cut next Thursday than the 50 basis point reduction from 3.25 per cent ... widely expected,' said economist Howard Archer at consultants IHS Global Insight.

'Indeed, there is a compelling case for a 100 basis point cut to 2.25 per cent,' he said.

Eurozone inflation has been in retreat since peaking at 4.0 per cent in June and July as oil and other commodities prices have plummeted in the face of a sharply slowing global economy.

Since reaching record highs above US$147 (S$221.85) in July, oil prices have dropped to about US$53 a barrel.

With the eurozone economy facing a deep downturn, the ECB has cut its main rate by a half percentage point twice in the last two months, bringing the benchmark cost of borrowing to 3.25 per cent.

ECB president Jean-Claude Trichet, who has come under fire for raising interest rates in July in the face of the then record inflation, said this week: 'We are ready to cut interest rates.'

The Organisation for Economic Cooperation and Development forecast on Tuesday that the countries sharing the euro would see their combined economy shrink 0.6 per cent in 2009 and warned recovery was unlikely before the second half of 2010.

Consumer and business confidence in the European Union slumped in November to the lowest level in 15 years, according to a widely watched European Commission survey on Thursday.

Adding to the gloom, Eurostat data also released on Friday showed that the eurozone unemployment rate ticked to the highest level in 21 months in October, hitting 7.7 per cent of the workforce. -- AFP