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Euro Zone Inflation Pressures Rise

Underlying price pressures in the euro zone crept up towards five-years highs in March, thanks to increased inflation in Germany and Spain, according to an index published by the Economic Cycle Research Institute on Friday.

ECRI, which designs indices aimed at predicting business cycles, said its Eurozone Future Inflation Gauge (EZFIG) rose to 102.3 in March from February's 101.8.

"The EZFIG has resumed its upswing, and is now close to September's five-year high. Thus inflationary pressures in the eurozone remain elevated," ECRI said in a statement.

Latest official euro zone data showed inflation rose to 2.4 percent in March, well above the European Central Bank's target of just below 2.0 percent.

The ECB left interest rates on hold at 2.5 percent on Thursday, but stepped up its anti-inflationary warnings and strongly signalled that investors are right to expect another interest rate increase in June.

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

The German index inched up to 87.3 from 87.0 in February, whilst the Spanish one rose to 159.3 from February's 155.3.

By contrast, the gauge for France held steady at 103.3 and the Italian index was firm at 101.5...