Inflationary pressures in the euro zone have eased, likely adding to pressure on the European Central Bank to ease monetary policy again, according to an indicator issued on Friday that is designed to predict cyclical trends.

The Eurozone Future Inflation Gauge (EZFIG) fell to 98.5 in December from 99.6 the month before. The gauge is a measure of the outlook for inflation published by the Economic Cycle Research Institute (ECRI).

"With the EZFIG slipping back in December towards September's seven-month low, euro zone inflation pressures have weakened," said Lakshman Achuthan, ECRI's chief operations officer.

With inflation well below its 2 percent target ceiling, the ECB is expected to cut its deposit rate further into negative territory in March and may add to the 60 billion euros a month it now spends buying bonds, a Reuters poll found.

Inflation was a feeble 0.4 percent in January, official data showed late last month. (Reuters)

Source: www.businessworld.ie