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Eurozone Inflation Pressures Nosedive

LONDON, Euro zone inflationary pressures crashed to a six-year low in December, a forward looking indicator showed on Friday, suggesting inflation would fall further in coming months.

The Economic Cycle Research Institute's Eurozone Future Inflation Gauge tumbled to 91.5 in December from 96.1 in November as inflationary pressures in the leading economies of Germany, France, Italy, and Spain all fell.

'The gauge has been in a straight-line plunge since last summer, correctly predicting the nosedive in euro zone inflation,' said Lakshman Achuthan, managing director of ECRI.

The data will add to expectations of a rate cut from the European Central Bank at its March rate setting meeting. The ECB left rates on hold at 2.0 percent on Thursday and said that inflation risks are diminishing.

Official inflation in the euro zone fell to 1.1 percent in January, the lowest in almost 10 years and well below the ECB's preferred target of below but
close to 2 percent.

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