German finance minister Wolfgang Schaeuble rejects talk of bail-out fund at EU summit "We expect the German labour market to remain in good shape as a modest economic recovery should already be under way and gain strength during the course of this year," said Thomas Harjes, economist at Barclays Capital. Elsewhere in the eurozone, Spanish prime minister Mariano Rajoy warned that Spain faces a "difficult" situation as it struggles to reduce its hefty deficit. "We will lower the deficit as much as we can," Mr Rajoy said, adding to speculation that Spain may have to ask the European Union to relax the deficit targets for this year. Annual inflation in the eurozone was revised down to 2.6pc in January, providing some good news for consumers. It was the lowest rate in five months, and fell from 2.7pc in December. The European Central Bank targets inflation at below, but close to, 2pc. "We continue to expect inflation to fall back towards the ECB's price stability definition in March/April, though the impact of world oil prices presents a clear upside risk to the outlook for inflation and could mean that the Governing Council has to accept a higher rate of inflation temporarily," said Gustavo Bagattini, economist at RBC Capital Markets.