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Euro Inflation Simmering

BANGALORE, Dec 3 - Inflationary pressures in the euro zone edged up in October, according to a forward-looking indicator from the Economic Cycle Research Institute.

New York-based ECRI said its Eurozone Future Inflation Gauge (EFZIG) rose to 97.4 in October from 96.4 in September, pushed up by rising inflationary pressures in all the major economies of Germany, France, Italy and Spain.

"While economic growth remains weak in parts of the euro zone, inflation pressures are rising slowly but surely, posing a potential dilemma for monetary policy," said ECRI's Lakshman Achuthan.

Despite being near the 22-month high seen in August, the EZFIG still remains far below the its 2008 peak.

The first official estimate of inflation for November in the 16-nation currency bloc was published on Tuesday at 1.9 percent, which was unchanged from the previous month and in-line with economists' expectations. [ID:nBRLTME68V]

The European Central Bank aims to keep inflation in the euro zone below but close to 2 percent over the medium term and the latest figures signal that the central bank is unlikely to hike rates any time soon.

On Thursday, the ECB left rates as expected at their record lows of 1.0 percent and committed to keep giving banks unlimited liquidity, well into next year as the economic stability of periphery members and raging debt crisis continue weigh on minds.