More than one in four people out of work in Greece and Spain as jobless rate rises to 11.6%, according to Eurostat data

Unemployment in the eurozone has risen to a new record, with more than one in four out of work in Spain and Greece.

There are now 18.49 million people without jobs in the 17 countries sharing the euro, said the European statistics office Eurostat on Wednesday with an extra 146,000 joining the ranks of the unemployed last month.

Youth unemployment – joblessness among under-25s – rose to 23.3%, up from 21% during the same month a year ago.

The prospect of high and rising unemployment, especially among younger workers, is expected to persuade the European Central Bank to cut interest rates in the new year from the current record low of 0.75% to support the flagging economy, which probably slumped back to recession in the third quarter, analysts said.

But in contrast to the hope of stimulus from the ECB, Brussels and most eurozone governments have put cuts in spending ahead of schemes to create jobs, despite predictions that the situation will worsen over the coming months.

Portugal's right of centre administration on Wednesday pushed through its third attempt at a budget for 2013, which is expected to lead to a third year of contraction and rising unemployment. Likewise Greece's coalition government published €13.5bn of spending cuts and tax rises that will result in a sixth year of falling GDP and and increase in the jobless rate.

Eurostat said the jobless rate across the eurozone increased to 11.6% in September, the highest on record, from a revised 11.5% in August.

The lowest unemployment rates were recorded in Austria (4.4%), Luxembourg (5.2%), Germany and the Netherlands (both 5.4%), which are near full employment. Spain (25.8%) and Greece (25.1% in July) had the highest unemployment in the eurozone, while France looks much like Italy (both at 10.8%), with a steady rise in joblessness. August data for Greece will be published next week, although the true picture is probably worse than the official figures show as a growing number of Greek workers remain nominally employed but have not been paid for some time.

Howard Archer, chief European economist at IHS Global Insight, said the jobless data was "dismal", adding: "Eurozone labour markets remain under serious pressure from ongoing weakened economic activity and low business confidence."

Youth unemployment also hit a new high in Spain with 54.2% of under-25-year-olds out of work, up from 53.8%.

Across the whole 27 nation European Union, 25.751 million men and women were without jobs last month – an increase of 169,000 from August – while the unemployment rate stayed at 10.6%.

By comparison, the unemployment rate was 7.9% in the UK, 7.8% in the US and 4.2% in Japan in September.

There was some good news for the eurozone though – inflation eased to 2.5% in October, from 2.6%. Energy prices continued to rise, by 7.8%, but by less than the month before, when they climbed by 9.1% year-on-year. Food became dearer, however, with prices up 3.2% compared with 2.9% in September.

Andrea Broughton, an economist at the Institute for Employment Studies said: "Given the ongoing financial difficulties of the European Union and the likelihood of continuing job losses in the public sector as austerity measures begin to bite, overall unemployment levels and youth unemployment in particular are likely to carry on rising for the foreseeable future."

She said a north-south split, which has dramatically opened up since the banking crash, would get worse.

"The trend is not upwards in all countries – unemployment levels actually decreased in seven member states on a year-on-year basis, including in Lithuania and Latvia, where it may be that the worst effects of the crisis are over. In Germany, although the economy is slowing there are as yet no adverse effects on unemployment, which has fallen on a year-on-year basis."

In some countries the unemployment figures are depressed by a rise in emigration. Ireland, Greece, Italy, Portugal and Spain have seen a strong rise in the number of people, mainly young, seeking work abroad.

Roughly 370,000 people emigrated from Spain in 2011, 10 times more than before the banking crisis hit the country in 2008.

Although about 86% of them were naturalised immigrants born abroad, there is also a growing number of native Spaniards saying "ya basta" ("enough is enough"). More than 50,000 left last year, up 80% since before the crisis hit.