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Eurozone Inflation Pressures Rise

(BANGALORE) Inflationary pressures in the euro zone edged up in May, according to a forward-looking indicator from the Economic Cycle Research Institute.

New York-based ECRI said its Eurozone Future Inflation Gauge (EFZIG) rose to 95.8 in May from a downwardly-revised 95.6 in April, pushed up by rising price pressures in Italy and Spain, mainly offset by declines in Germany and France.

"While euro zone inflation pressures are still somewhat muted, they have risen steadily since the spring of 2009," said ECRI's Lakshman Achuthan in a statement.

The survey stated that despite this consistent increase in inflationary pressures, it still remains far below the highs seen in 2008.

The first estimate of inflation in the 16-nation currency bloc for June came out lower than expected on Wednesday, at 1.4 per cent, down from 1.6 per cent in May and below the 1.5 per cent consensus forecast in a Reuters poll.

The European Central Bank aims to keep inflation below but close to 2 per cent over the medium term.

The central bank is expected to leave rates at their record lows of 1.0 per cent when it meets on July 8 and is unlikely to move until the second half of 2011.