Christine Lagarde: Hearing of the Committee on Economic and Monetary Affairs of the European Parliament
Speech by Ms Christine Lagarde, President of the European Central Bank, at the Hearing of the Committee on Economic and Monetary Affairs of the European Parliament, Brussels, 26 February 2026.
The views expressed in this speech are those of the speaker and not the view of the BIS.
Charts accompanying the speech
It is a pleasure to return to this Committee for our regular dialogue.
Let me start with a solemn reminder that this week marks four years since Russia launched its unjustified aggression against Ukraine. Our thoughts are with the Ukrainian people, who continue to endure immense suffering, and we stand in full solidarity with all those affected by this war.
The euro area has faced an exceptionally challenging environment over recent years, with high inflation affecting both households and firms.
We can now see, however, that our efforts to bring inflation down have been effective. Inflation has fallen markedly from its peak of 10.6% in October 2022. It fluctuated in a narrow range around 2% in the second half of last year and stood at 1.7% in January. The ECB's decisive monetary policy response played a crucial role in bringing inflation back to target.
However, even though inflation has declined, surveys show that many citizens still perceive prices to be rising faster than the official data suggest.
This gap between measured and perceived inflation is not merely a statistical curiosity – it is a historical and global regularity. And it has implications for economic decisions and for trust in institutions – trust that helps anchor inflation expectations.
Today's discussion is therefore timely and relevant. Before turning to the topic of inflation perceptions, I will start by outlining our assessment of the euro area economy and our monetary policy stance.