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Eurozone Future Inflation Gauge Falls Again


A key gauge of forward-looking euro zone inflation pressures fell further in February, suggesting inflation will drop further in coming months.

The Economic Cycle Research Institute said its Eurozone Future Inflation Gauge dropped to 86.4 in February from 88.2 in January as consumer prices in the 16-nation bloc continue to turn down steeply.

"With the EZFIG falling to a new all-time low in its latest reading, consumer prices are poised to retreat in the months ahead," ECRI said in a release on Friday.

The European Central Bank cut its key interest rate by a smaller-than-expected 25 basis points on Thursday, putting them at a record low of 1.25 percent. But it is expected to follow this up with another 25 point cut in May.

Inflation in the euro zone plunged to an all time low of 0.6 percent in March, well below the ECB's 2.0 percent target.