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Consumer prices in the single currency bloc rose 1.3pc in the year to August, a fall from July’s 1.6pc and below expectations of a fall to 1.4pc, largely driven by lower energy costs.  The drop, bringing inflation well below the bank’s target of just under 2pc, gives the bank plenty of room to cut its interest rate again and is likely to place the issue at the center of next week’s debate.  Board members have sent out mixed messages in the run-up to their next meeting. Executive board member Peter Praet, speaking earlier this month, said the bank “had not reached the lower bound on our key interest rates” and had not “run out of ammunition”.  Cyprus’ Panicos Demetriades also said another cut was still “on the cards”.   However, more recent remarks by board member Ewald Nowotny indicated that the nascent recovery in the eurozone will prevent the ECB from lowering rates. “I would not see many arguments now for a rate cut,” he said.  Joblessness in the euro area stayed at its record-high of 12.1pc in July, though the headline figure masks huge variations stretching from just 4.8pc in Austria to 27.6pc in Greece.  The overall rate has now remained unchanged for four straight months.  While signals of economic strength are not yet eroding unemployment in the bloc, they are boosting business sentiment, which this month rose sharply, even in some countries where unemployment is still high.  Confidence among business managers in the eurozone polled by the European Commission climbed for a fourth successive month in August.  Meanwhile, in Portugal, the government has vowed to meet its cost-cutting targets under its EU-IMF bail-out programme despite opposition to its austerity package, which suffered a third major setback on Thursday when the constitutional court blocked a bill allowing it to fire public sector workers.