ECB seen from Goetheturm Frankfurt (Roman Kessler)ECB seen from Goetheturm Frankfurt (Roman Kessler)

Frankfurt, Germany — The European Central Bank (ECB) sees inflationary pressures from new wage agreements leveling off, its president Christine Lagarde said at the Hearing of the Committee on Economic and Monetary Affairs of the European Parliament.

Quoted from the last hearing before the end of this legislative term

Wage growth continues to be strong and is expected to become an increasingly important driver of inflation dynamics in the coming quarters, reflecting tight labour markets and workers’ demands for inflation compensation. The ECB’s forward-looking wage tracker continues to signal strong wage pressures, but agreements indicate some levelling offin the last quarter of 2023. Wage pressures for 2024 hinge particularly on the outcome of ongoing or upcoming negotiation rounds that affect a large share of euro area employees. The contribution of unit profits to domestic price pressures continued to decline, suggesting that, as expected, wage increases are at least in part buffered by profit margins.

By Silvia Orfeo

Silvia Orfeo is a Sr. Politics and Economics Reporter at Nobot.News

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