Growth in negotiated wages slowed to 3.55% from the previous 4.74% mark
ECB chief economist Philip Lane is relaxed about wage growth remaining above levels consistent with a 2 per cent inflation target. File photograph: Irish TimesEuro zone negotiated wage growth slowed last quarter, bolstering the case for another interest rate cut in September and assuaging policymakers’ fears that runaway labour costs would continue to put upward pressure on inflation.
The bank cut interest rates by 25 basis points in June in a move some considered somewhat premature but kept policy unchanged in July and gave almost no hint about its likely move on September 12th.Still, markets see a more than 90 per cent chance of another rate cut next month and expect at least one further move before the end of the year as price pressures appear to be easing and the economy continues to flirt with recession.
“We think that the first quarter has likely been the peak for negotiated wages in the euro area,” Morgan Stanley said in a note.
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