ECB Sees Euro-Area Pay Growth Accelerate, But Still Below Peak Levels

The European Central Bank (ECB) has released its wage tracker data, indicating that euro-area pay growth is expected to accelerate through early 2027. According to the ECB's projections, salaries will rise by an annual 2.7% in the first quarter of next year, following a 2.6% increase in the third and fourth quarters. This rate is stronger than previously predicted for the first six months but remains below the peak of 5.2% recorded in 2024.

The ECB's wage tracker takes into account various economic indicators to gauge inflation resulting from the Iran war, which has had a significant impact on global markets. While the predictions suggest a slight acceleration in wage growth, it is still far below previous peaks and indicates that the ECB remains cautious about inflationary pressures.