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Eurozone negotiated wages accelerated to 3.95% in Q2, up sharply from 2.46% in Q1, the ECB reported on Friday. Though well below the 2024 peak of 5.4%, the acceleration suggests cost pressures remain sticky.
Some analysts noted that much of the gain reflected one-off payments, raising the possibility that the rise is short-lived. Still, with services inflation remaining elevated, policymakers have little scope to accelerate easing after already cutting the deposit rate to 2.00%.
Whether wage growth cools in the coming quarters will be central to determining if the ECB can continue on its path toward looser policy.
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