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Eurozone FIG Edges Up

Inflationary pressures in the euro zone edged up in July from June's seven-month low, driven by increases in Germany and Italy, an indicator designed by the Economic Cycle Research Institute to predict inflation trends showed.

New York-based ECRI said its Eurozone Future Inflation Gauge (EZFIG) rose to 101.1 in July from 100.5 in June.

"In line with the downturn in the EZFIG, euro zone inflation has decreased from this spring's high. Meanwhile, despite its latest uptick, the EZFIG remains below April's 31-month high," said Lakshman Achuthan, ECRI's chief operations officer.

"Thus, euro zone inflation pressures remain in an easing trend."

Inflation trends showed an uptick in price pressures in Germany, Europe's largest economy, and Italy but pressures ebbed slightly in France and Spain.

Preliminary data released on Wednesday showed inflation in the 17-nation common currency bloc at 2.5 percent in August, unchanged from the previous month and still above the European Central Bank's two percent target ceiling.

The ECB has raised its key lending rate twice since April to take the refi rate to 1.5 percent in an effort to control inflation in the euro zone.

However, slowing economic growth and sovereign debt troubles in the bloc that is now knocking on the doors of larger countries like Italy and Spain will prompt the ECB to leave rates on hold until the final quarter of 2012

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