(May 6): Euro-area pay growth is set to accelerate in the second half of the year, the European Central Bank said as it gauges whether spillovers from high energy costs will require it to increase interest rates.
The ECB’s wage tracker, published Wednesday, predicts salaries will rise by an annual 2.6% in both the third and fourth quarters. That’s stronger than the projection for the first six months but still far below the 2024 peak of more than 5%.
The ECB is assessing whether things like salary demands will sustain the jump in inflation caused by the Iran war. After rates were kept at 2% last week, President Christine Lagarde said firms don’t currently plan to boost wages significantly. But fresh memories of the 2022 price spike may trigger rapid compensation requests by workers.
An ECB survey published this week showed companies in the first quarter still anticipated wage growth would moderate to 2.9% this year and 2.8% and next, from 3.5% in 2025.
Uploaded by Arion Yeow
