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EZ Inflation Gauge Races to 17-Year High


Euro zone inflationary pressures leaped to a 17-year high in May, led by a sharp pick-up in Germany, a forward-looking inflation indicator published by the Economic Cycle Research Institute showed on Thursday.

The Eurozone Future Inflation Gauge, which aims to predict cyclical turns in inflation, rose to 111.0 in May from 109.2 in April, hinting at worse to come for inflation in the 15-nation bloc.

The indicator was pushed higher by a surge in German inflationary pressures. That index rose to a 26-year high at 116.3 in May from 111.6 in April. Indicators for France and Spain showed inflationary pressures eased in May while still at high levels.

Official euro zone inflation rose to 4.0 percent in June, which is likely to prompt the European Central Bank to raise interest rates by 25 basis points to 4.25 percent later on Thursday as is widely expected.
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