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"Respondents indicated that the upward revisions reflected recent data outturns showing more persistence than expected as well as higher forecast wage growth," the ECB said.

In a separate report on cereals supply and demand, the FAO forecast world wheat production in 2023 of 785 million tonnes, slightly below 2022 levels but nonetheless the second largest outturn on record.

"To our judgement a pause seems to be the most likely outturn, although that does not necessarily imply that tightening has finished," they said in a note to clients.

Its forecast for adjusted annual operating profit was unchanged at 7.8-8.2 billion euros, representing a decline of 1%-6% from last year’s outturn.

The Bank expected the economy to expand by an unremarkable 0.3% in the first quarter, but the evidence points to a better outturn.