ECB policymaker Escriva highlights wage monitoring as key to inflation risks but sees no immediate second-round effects.
The European Central Bank’s latest wage growth tracker indicates negotiated wages will rise by 2.6% in 2026, unchanged from prior forecasts and below the 3.0% pace expected in 2025. The data suggests wage pressures remain moderate, aligning with gradual disinflation rather than inflation acceleration.
Broader labor cost measures have also cooled, reinforcing the ECB’s view that second-round effects from energy-driven inflation have not yet materialized. Policymakers remain divided on whether further tightening is needed, with wage growth now a critical indicator after the ECB’s recent 25 bps hike.
Euro area inflation is projected at 3.0% in 2026, keeping the focus on domestic price-setting behavior. While risks persist, stable wage growth provides reassurance that inflation shocks have not triggered broader economic pressures.