Contact Us



Eurozone Inflation Pressures Rise

Underlying price pressures in the euro zone rose to the highest level in over a year in March but remain relatively modest, an index compiled by the Economic Cycle Research Institute showed on Friday.

ECRI, which designs indices aimed at predicting business cycles in leading economies, said its Eurozone Future Inflation Gauge (EZFIG) rose to 93.8 in March from an upwardly revised 92.6 in April.

The March level is the highest since January 2003, when the index reached 94.1 as the cost of raw materials, notably oil, rose ahead of the Iraq war.

"Euro zone inflation pressures have now climbed to the highest level in over a year," ECRI said. "Still, they are relatively subdued, suggesting that euro zone inflation will remain mild for now."

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 rose to 78.5, its highest level since February 2003, from a downwardly revised 75.2 in February. "German inflation pressures remain relatively subdued for now, but they are clearly on the rise," ECRI said.

In France, the index rose to 101.7 from an upwardly revised 101.6, and ECRI said French inflation was likely to continue a slow climb in coming months.

The Italian index rose to 98.4 from an upwardly revised 98.3, but ECRI said it was still close to December's four-year low, "suggesting that inflationary pressures will stay relatively restrained."

The only national index that fell was Spain's, to 122.5 from 124.3. "Despite its latest decline, the (Spanish gauge) remains well above its 2002 low," ECRI said. "Spanish inflation is likely to trend upward, while remaining subdued in the near term."

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