ECB sees limited wage pressure despite inflation
The Chief Economist at the European Central Bank confirmed that the main source of inflation this year is rising energy prices, and he does not observe significant wage pressures as a result. Despite the inflation rate exceeding 3% and forecasts suggesting it will reach 4% before the end of the year, it is believed that the impact of higher energy prices on wages is limited, as people reassess increased living costs and deal with companies facing fierce competition from China and utilizing AI-powered robots. The rise in energy prices has led the market to anticipate three to four additional interest rate hikes, with expectations that the peak interest rate will remain below 3% next year and decline by the end of 2027. However, energy prices could follow a negative scenario until mid-next year, amid concerns over declining natural gas inventories, which heighten economic risks.
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