Watch the wage agreements!

When the ECB will cut interest rates depends heavily on wage settlements.

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Christoph Weil

Commerzbank Economic Research

January 12 2024

From the ECB's perspective, wage settlements will play a significant role in interest rate decisions in the coming months. We analyze the current situation on the wage front and what can be expected in the coming months. For the foreseeable future, wages are likely to rise much faster than productivity, which argues against a sustained fall in inflation to the ECB's 2% target.