Euro Zone Inflation Pressures Rise

Underlying price pressures in the euro zone rose in January and are likely to creep higher in the months ahead, 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 101.2 in January from December's downwardly revised 99.4.

"With eurozone inflation pressures continuing to creep up, inflation in the eurozone is likely to do the same," ECRI said in a statement.

Latest official euro zone data showed inflation eased in February to an annual rate of 2.3 percent from 2.4 percent in January, as the upward pressure from high energy prices wore off.

The European Central Bank has raised interest rates by 50 basis points since December to 2.5 percent partly to get inflation closer to its target of below, but close to, 2 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 euro zone gauge uses a weighted average of ECRI's indices for Germany, France, Italy and Spain...

In January, the overall euro zone gauge was pushed up by increased inflation pressures in Germany and Italy.

The German index inched up to 87.2 from a downwardly revised 82.4, whilst the Italian one edged up to 102.2 from December's upwardly revised 101.5.

By contrast, the gauge for France held steady at 102.8 and the Spanish index eased to 149.3 in January from a downwardly revised 152.3 the previous month...