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Inflation in euro-zone to remain lower than in US

Price pressures are building in the US and we think they will be longer-lasting than the Fed expects, but it is a very different story in the euro-zone. A weaker economic recovery and a flat Phillips curve suggest that after a brief period of above-target price rises this year, both headline and core inflation will drop back in 2022. Over the longer term, inflation is likely to trend up to 2% only very slowly.

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