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Euro Inflation Pressures Rise

Underlying price pressures in the euro zone rose in July as inflationary influences increased in the bloc's four biggest economies, an index compiled by the Economic Cycle Research Institute showed on Friday.

ECRI, which designs indices aimed at predicting business cycles in leading economies, said its Eurozone Future Inflation Gauge (EZFIG) rose to 101.3 in July from a downwardly revised 99.6 in June.

"The EZFIG increased further in July, thus maintaining its uptrend, which anticipated the current upswing in euro zone inflation," the New York-based institute said. "If the EZFIG continues to rise, actual euro zone inflation is likely to edge further upward."

The euro zone's latest official inflation reading showed year-on-year price growth at 2.1 percent in August, down from 2.2 percent the previous month, but still above the European Central Bank's target ceiling of 2.0 percent.

The ECRI gauge aims to anticipate cyclical swings in the region's inflation rate and changes in official interest rate policy by measuring underlying inflationary pressures, rather than actual inflation rates.

It is similar to ECRI's inflation indices for the United States, Britain and Japan.

The gauge for Germany rose to 85.8 from June's 83.7, suggesting that inflation in the euro zone's biggest economy will continue to trend up.

The French index ticked up to 102.7 in July from a downwardly revised 102.5, whilst the Italian index climbed to 100.9 from 100.7.

The Spanish gauge jumped to 158.3 from 151.4 the previous month...

The euro zone gauge uses a weighted average of ECRI's indices for Germany, France, Italy and Spain...