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Eurozone price pressures at 27-mth low

Price pressures in the euro zone fell to a 27-month low in June, easing in all four of the bloc's biggest economies, according to an indicator by the Economic Cycle Research Institute (ECRI) designed to anticipate cyclical swings in the rate of inflation.

German, French, Italian and Spanish June future inflation guages fell, pushing down the Eurozone Future Inflation Gauge (EZFIG) to 93.2 from 94.8 in May, ECRI said on Friday.

'With inflation pressures falling in almost every major euro zone economy, the EZFIG dropped in its latest reading to a 27-month low,' said Lakshman Achuthan at ECRI. 'Thus, Eurozone inflation is likely to recede further in the months ahead.'

The official inflation rate in the 17-nation currency bloc held steady for the third straight month in July at 2.4 percent, according to flash data released on Tuesday.

Deteriorating growth and a lack of price pressures in the euro zone prompted the European Central Bank to cut its main refinancing rate to a record low of 0.75 percent in July.

Although the bank left interest rates on hold at its meeting on Thursday, the Governing Council did consider a further rate cut amid signs that an economic recession in peripheral European countries is spreading across the continent.

ECB President Mario Draghi said on Thursday inflation is expected to fall below the central bank's target of just below two percent next year.

A Reuters poll of nearly 50 economists taken after the ECB's meeting found most expect it to cut rates to a new record low of just half a percent in September.


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