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U.K. FIG Hints at Upturn

A leading indicator of underlying inflation in Britain edged up for the second consecutive month in February, suggesting that a long period of falling inflation had come to an end, a leading research body said on Friday.

The Economic Cycle Research Institute (ECRI), a New York- based body that specialises in monitoring turning points in the business cycle, said its Future Inflation Gauge (FIG) had ticked up to 102.2 from 102.1 in January and a trough of 101.4 in December. But Anirvan Banerji, director of research, told Reuters that this was only a gentle uptick so far on the back of the global industrial recovery currently underway. "There is not as sharp an upturn in the UK FIG as there has been in the U.S. one, although there had not been such a sharp downturn," he said, adding that the U.S. FIG recently hit a 26-year low whereas Britain's one only a five-year low.

Britain's underlying inflation rate has been tame in recent years, coming in under the Bank of England's 2.5 percent target for 31 of the last 33 months. Some economists are expecting it to turn up this year, however, as the economy recovers from its slowdown at the end of last year and because of the recent surge in oil prices.