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Eurozone Inflation Pressures Ease


Underlying price pressures in the euro zone eased in December as inflationary influences weakened in Germany, Italy and Spain, an index compiled by the Economic Cycle Research Institute (ECRI) showed on Friday.

ECRI, which designs indices aimed at predicting business cycles in leading economies, said its Eurozone Future Inflation Gauge (EZFIG) fell to 93.8 in December from a downwardly revised 96.0 in November.

"If the downturn in the EZFIG persists, actual euro zone inflation is likely to ease in the near future," ECRI said in a statement.

The 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 gauge for Germany slipped to 77.3 from an upwardly revised 81.3 the previous month.

"Based on a reasonably pervasive decline in its components, the (German index) reached a 10-month low in its latest reading," ECRI said.

The Spanish index fell to 124.1 from November's downwardly revised 127.1, and the Italian gauge also edged lower, to 98.9 in December from an upwardly revised 100.0.

However in France, inflation pressures maintained their rising trend.
The index was flat at 102.5 in December.

The (French gauge) is still well above its January 2003 low. Thus French inflation pressures remain elevated," ECRI said.

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