Euro-Area Pay Growth Eases Further, ECB Seeks Inflation Clarity

The European Central Bank (ECB) has announced that euro-area pay growth eased in the second quarter, providing relief to the bank as it assesses inflation risks. The key measure of negotiated wages rose by 2.44% from a year ago, which is lower than the previous period's revised reading of 2.56%. This rate is significantly below the peak of 5.55% reached in 2024.

The data suggests that pay growth has been slowing down in the euro area. The ECB is likely to view this as a positive development, given its concerns about inflation risks. However, it's worth noting that the current reading is still higher than pre-pandemic levels.