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EZ Future Inflation Gauges

Price pressures in the euro zone fell slightly in July as inflationary influences in France and Spain decreased, 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 slipped to 92.3 in July from a downwardly revised 92.4 in June. "Underlying inflation pressures in the euro zone remain above the lows seen at the end of 2001 but are not in a strong uptrend," the Institute said.

In France the index fell to 102.7 from June's 103.0, while the Spanish index dropped to 111.6 from a downwardly revised 113.8 in June.
The German index rose to 76.6 in July from a downwardly revised 75.9 in June, while the Italian index was unchanged in July from June's upwardly revised 99.0. "German inflation pressures remain in a gentle uptrend," the Institute said.

"Italian inflation pressures remain in a slow but steady uptrend, suggesting that inflation is likely to edge up in the near term."

The euro zone 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 indexes for the United States, Britain and Japan.

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