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U.K. FIG Nudges Higher

Inflation pressures in Britain rose gently for the fifth month running in June, a leading research body said on Friday.

The Economic Cycle Research Institute, a New York-based body that specialises in monitoring turning points in the business cycle, said its Future Inflation Gauge nudged up to 104.3 in May from 103.9 in April.

The gauge has been on the rise since hitting a five-and-a-half year low of 101.5 in December 2001.

Underlying inflation in Britain was 1.8 percent in May, its lowest since 1975 and comfortably below the government's 2.5 percent target.

A sharp rise in inflationary pressures would increase the likelihood of a rise in interest rates, which were left static for the eighth month running on Thursday, at a 38-year low of 4.0 percent.

Many economists now forecast a rise in borrowing costs at the next meeting of the Bank of England's Monetary Policy Committee in August.