ECB Wage Tracker Points to Modest Pay Growth Ahead

The European Central Bank's wage tracker has pointed to a modest increase in negotiated pay growth. According to ECB data, from the end of this year through the first quarter of next year, negotiated wage growth is expected to be around 2.6% to 2.7%. This uptick is a slight change from the broad stability seen for most of this year.

The ECB's tracker suggests that pay growth will pick up further in 2024, reaching 2.8%. The central bank closely monitors wage developments to ensure they are not fueling excessive pay demands that could exacerbate inflation.

Despite concerns about inflation surging, the ECB argues that wage growth around 3% is consistent with its target of keeping inflation at 2%.