Berlin  - Consumer prices in the 16-member eurozone remained in negative territory in September, data to be released Wednesday is predicted to show with the figures coinciding with signs of a pickup in unemployment across the region.

Annual eurozone consumer prices came in at minus 0.2 per cent this month, analysts forecast the European Union's statistics office will say.

The release of the eurozone's preliminary inflationary data forms part of the buildup to next week European Central Bank (ECB) meeting with analysts believing that the ECB is currently in no rush to raise interest rates despite evidence that a recovery is taking hold.

A closely watched European Commission survey released Tuesday showed economic confidence in the eurozone hitting a 12-month high in September.

The commission said its economic sentiment survey for the eurozone rose to 82.8 points in September from 80.8 in August. The September increase was in line with economists' forecasts.

But said ING Bank economist Martin van Vliet: "The bottom line is that despite the further improvement in September, economic sentiment remains fragile."

That said, however, Tuesday's survey helps to raise expectations that the eurozone will emerge from recession during the third quarter after the region's currency contracted by just 0.1 per cent in the three months to the end of June.

However, underscoring the ongoing economic uncertainty in Europe, figures to be published later this week are forecast to show that jobless queues are swelling across the region.

Indeed, despite signs that the eurozone could return to eocnomic growth in the coming months, unemployment in the currency bloc edged up to 9.6 per cent in August from 9.5 per cent in July, data to be released Thursday is projected to show.

In the meantime, core consumer prices in Japan fell a record 2.4 per cent in August compared to the same month in 2008, as weaker oil prices and consumer spending left the nation facing its second bout of deflation this decade.

Economists warn that further although more moderate falls in Japanese consumer prices could emerge in the coming months.

However, while predicting that eurozone inflation would slump into negative territory this year, ECB chief Jean-Claude Trichet has insisted that the currency bloc did not face a protracted period of deflation.

Eurozone inflation slumped to a record low of minus 0.7 per cent in July as lower energy prices and the global economic slowdown undercut inflationary pressures in Europe. (dpa)