FRANKFURT (Reuters) – The European Central Bank’s wage tracker and feedback from corporations both show that wage pressures are cooling and will continue to ease into next year and 2026, ECB chief economist Philip Lane said on Thursday.
“The reason why we think inflation will come down … next year is that this is the last year of high wage increases and the wage increases will look more normal,” Lane said during a lecture in Naples.
Firms directly surveyed by the ECB are also expecting a big slowdown in wage growth, more in line with figures that will let the ECB cut inflation back to its 2% target by next year.
“Compared to last year, where a lot of (firms) were expecting wages to go by five or six (percent), now they’re saying around three to four,” Lane added.