Euro area annual inflation was 1.9 percent in November 2010, unchanged compared with the last month and within the European Central Bank's (ECB) target, the European Union's statistics office Eurostat said on Thursday. On a monthly basis, inflation rose 0.1 percent in November.

The main drivers of the annual rate rise were transport (3.8 percent), alcohol & tobacco (3.4 percent) and housing (3.3 percent), Eurostat said. The lowest annual rates were observed for communications (-0.8 percent), recreation & culture (0.0 percent) and household equipment (0.7 percent).

A year earlier the inflation rate was 0.5 percent. In the broader European Union, annual inflation was 2.3 percent in November, unchanged compared with October. A year earlier the rate was 1.0 percent, Eurostat said.

The lowest annual rates were observed in Ireland (-0.8 percent), Slovakia (1.0 percent) and the Netherlands (1.4 percent) while highest rates were recorded in Romania (7.7 percent), Estonia (5.0 percent) and Greece (4.8 percent).

Eurostat said in a separate report that wage growth dropped significantly to 0.7 percent in the third quarter from 1.5 percent in the second quarter on an annual basis.

Total hourly labor costs rose 0.8 percent in annual terms in the third quarter, weakening from 1.6 percent in the second quarter.

The drop in wages was significant in Greece, Spain and Portugal, the peripheral countries exposed to the sovereign debt crisis, data showed.