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European FIG Updates


LONDON, Oct 6 (Reuters) - Euro zone inflation pressures edged slightly lower in August but remained high, supporting expectations of more interest rate hikes this year in the euro area, the Economic Cycle Research Institute said on Friday.

ECRI's Eurozone Future Inflation Gauge, which forecasts cyclical turns in inflation across the 12-nation bloc, slipped to 104.6 in August from 104.7.


"The EZFIG slipped in August, but remains relatively high, suggesting that inflation pressures in the Eurozone have not yet come off the boil," ECRI said in a statement.


A Reuters poll of economists carried out after the European Central Bank on Thursday raised interest rates to 3.25 percent showed another quarter point hike to 3.5 percent is on the cards by the end of the year.


ECB President Jean-Claude Trichet's comments that the bank would "monitor very closely" all developments to ensure price stability and that inflationary pressures persisted despite a sharp full in oil prices helped harden those expectations.


ECRI said easing inflation pressures in Germany, France and Italy were almost fully offset by a rise in Spanish inflationary pressures.


Despite some slippage, ECRI said inflation pressures remained elevated in Germany, France and Italy, the bloc's three largest economies.


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