The unemployment rate in the eurozone continued to rise in January, hitting another record high.

The jobless rate in the 17 countries that use the euro rose to 10.7% in January, while December’s figure was revised up from 10.4% to 10.6%.

There are now 16.9 million people out of work in the bloc, Eurostat said.

In Italy, the unemployment rate rose to 9.2% in January, the highest since monthly records began, the national statistics agency Istat said.

Italian unemployment had stood at 8.9% in December, but it is now at the highest rate since the first quarter of 2001, as the country finds itself in a second recession in four years.

Spain continues to have the highest unemployment rate in the euro area at 23.3%, while Austria has the lowest at 4%.

In its latest unemployment report, Eurostat said the unemployment rate in the 27 EU countries reached 10.1% in January, with a total of 24.3 million people out of work.

December’s jobless rate was also revised up from 9.9% to 10%.

The data comes a day after the European Central Bank (ECB) said it had provided a further 530bn euros ($713billion; £448billion) of low-interest loans to 800 banks across the EU.

The announcement appeared to have been welcomed by the market, with banking shares rising strongly on Wednesday.

But Steen Jakobsen, chief economist at Saxo Bank, said: “Despite the euphoria in the banking sector following the ECB’s loan programme, the real economy remains very depressed and the key factor is the unemployment rate, both socially and because of the damage to growth.

“If you look at Spain’s unemployment rate, it is up two percentage points in January and even Italy’s rate continues to rise, so I am concerned that we really are lacking the fundamental reforms needed for growth.

“There’s a huge divergence between the feelgood factor in the stock market and what’s happening in the real economy. For all the money the ECB is printing, there isn’t yet a big boost for companies in terms of credit.”

Meanwhile, separate data from Eurostat showed that inflation in the euro area rose to 2.7% in February, rising slightly from 2.6% in January.

It marks the 15th month in a row that inflation has been above the ECB’s target of just below 2%.

Howard Archer, chief European economist at IHS Global Insight, said it amounted to a “double whammy of bad news” for the eurozone.

“This is particularly bad news for consumers, as they are not only facing high and rising unemployment, but also still squeezed purchasing power,” he said.

“It had been hoped that eurozone consumer price inflation would be heading down markedly by now, but these hopes are being scuppered by high oil prices.”