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flag ECB holds rates steady, sees inflation near 2% target despite public perception of higher prices.

flag In February 2026, ECB President Christine Lagarde stated inflation is expected to stabilize near the 2% target, with core inflation at 2.2% and real wages above pre-pandemic levels, despite persistent public perception of higher prices. flag She emphasized the gap between measured and perceived inflation, attributing it to psychological factors and lasting impacts of past shocks, and stressed the need for clearer ECB communication. flag The ECB kept rates unchanged, maintaining a data-dependent, flexible approach with no pre-commitment to future moves, as growth remains supported by domestic demand but constrained by global headwinds.

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