ECB less concerned about inflation as wages slow

European Central Bank data showed a significant slowdown in negotiated wage growth across the Eurozone, with the growth rate falling to around 2.6% by the end of 2026, compared to 3.2% last year. This has alleviated concerns that rising wages could fuel inflation and lead to sharp interest rate hikes, as wage levels remain within the target inflation range of 2%. These figures provide reassurance to policymakers, as the report on stable wage growth reduces pressure on the European Central Bank to raise interest rates rapidly.

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