Inflation pressures in the euro zone eased to a 13-month low in October, according to a forward looking indicator from the Economic Cycle Research Institute (ECRI) that is designed to predict trends in inflation.

October's Eurozone Future Inflation Gauge (EZFIG) was down at 97.7 from 98.5 in September, suggesting that euro zone inflation remains in a cyclical downward trend.

"With the EZFIG declining from its springtime high to a 13-month low in October, euro zone inflation pressures continue to lessen," said Lakshman Achuthan, ECRI's chief operating officer.

Inflationary pressures were down in all major countries in the euro zone with the German index declining to 103.1 from 104.1, the French slightly lower at 101.4 from 101.6 and Italy easing to 96.0 from 96.4.

Headline inflation in the 17 country region remained stuck at 3 per cent for the third consecutive month in November, according to a flash estimate released on Wednesday.

The European Central Bank is nevertheless expected to cut interest rates to 1.0 per cent at its meeting next week, as the region's debt crisis is threatening to push the euro zone into another recession.

The new president of the ECB, Mario Draghi, signalled yesterday the bank was ready to take fresh steps to tackle the debt crisis, saying risks to the economy had grown, but reiterated the bank's aim of keeping inflation just below 2 per cent.

A similar indicator showed inflationary pressures in Britain continued to abate as the UK Future Inflation Gauge (UKFIG) fell to a 25-month low of 101.7 in October from 102.6 in the previous month.

Reuters