Underlying price pressures in the euro zone rose further in November as inflationary influences grew in all four of the region's major economies, the Economic Cycle Research Institute (ECRI) reported today.
The ECRI, which designs indices aimed at predicting business cycles in leading economies, said its Eurozone Future Inflation Gauge (EZFIG) rose to 93.3 from a downwardly revised 92.7 in October.
"Euro zone inflation has already moved up a bit from last summer's low in the wake of the rise in the gauge," the ECRI said. "With the gauge rising further, euro zone inflationary pressures remain in a gentle uptrend."
The 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 indices for the United States, Britain and Japan.
The gauge for Germany rose to 76.8 from 76.0 as raw materials and import prices, loans to enterprises and manufacturing orders books all grew, partly offset by lower money supply growth and a widening yield spread.
In France, the index rose to 101.6 from 101.5 and ECRI said it was signalling that French inflation was "likely to move somewhat higher in the coming months."
The Italian gauge rose to 98.9 from 98.3. ECRI said despite the uptick, Italian inflation pressures remained subdued. The Spanish gauge rose to 123.6 from 122.5, showing inflation pressures rising gently.
The euro zone gauge uses a weighted average of ECRI's indices for Germany, France, Italy and Spain, whose components include measurements of bond yields, loans to individuals and businesses, raw material prices, employment and unemployment, money supply and business activity.