U.S. Markets

Euro zone inflation likely to rise, could yet fall: PIMCO

The offices of Pacific Investment Management Co (PIMCO) are shown in Newport Beach, California August 4, 2015. REUTERS/Mike Blake

LONDON (Reuters) - Inflation in the euro zone is likely to rise gradually but there is a chance that it has not yet touched its low point, Andrew Balls, global fixed income chief investment officer with investment firm PIMCO, said on Thursday.

“Our baseline is that we will see a gradual drift higher in inflation, but I don’t think we’ve necessarily seen the low. In the event of a shock there’s a real problem. You start from a bad position,” Balls told reporters.

The European Central Bank is likely to raise its growth and inflation forecasts later on Thursday, striking a more upbeat note on the euro zone’s economy.

Balls said inflation looked set to rise as a result of a pickup in global oil prices and the ECB’s huge bond-buying program.

Writing by William Schomberg; editing by Jamie McGeever