FRANKFURT, March 1 Reuters Euro zone inflation dipped last month but underlying price growth remained stubbornly high, adding to the case for the European Central Bank to hold interest rates at record highs a bit longer before starting to ease policy towards midyear.

Inflation across the 20nation euro zone fell to 2.6 in February from 2.8 a month earlier, just shy of expectations for 2.5, data from Eurostat, the EU39;s statistics agency showed.

But crucial core figures, which strip out volatile food and fuel prices, only declined to 3.1 from 3.3, missing expectations for 2.9 and holding uncomfortably above the ECB39;s 2 target.

The ECB has kept its deposit rate at a record high 4 since September but talk of easing is now rampant and policymakers are now mostly debating the timeline for rate cuts and not whether a reversal is appropriate.

The ECB jacked up rates in record quick time from mid2022 after inflation spiked above 10 but price growth is now approaching its 2 target and policymakers have already said that new projections, due next Thursday, are likely to show a quicker return to target.

Still, the February data are unlikely to alleviate lingering concerns about underlying price pressures as inflation in the crucial, labourintensive services sector eased only to 3.9 from 4.0.

The ECB39;s key worry is that wage inflation is just too fast and unless workers start showing some restraint soon, prices could bounce back.

Wages are seen growing by more than 4.5…