Euro zone wage setters see inflation spike as temporary, ECBs Lane says

div classBodysc17zpet90 cdBBJodivpFRANKFURT Reuters – The latest wage deals in the euro zone show employers and unions believe the current spike in inflation will prove temporary, the European Central Banks chief economist Philip Lane said on Thursday.p

pThis would be a welcome development for an ECB seeking to prevent high inflation, which hit a record 7.5 last month, from becoming entrenched above its 2 target.pdivdivdiv classBodysc17zpet90 cdBBJodiv

p“The frontloaded nature of recent wage settlements with 2022 increases larger than 2023 increases suggests that wagesetters understand that there is a temporary component to the currently high inflation rate,” Lane said.p

pHe noted wage agreements concluded since the start of this year pointed to wage growth of around 3 per cent in 2022 and 2.5 per cent in 2023. p

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pp Reporting By Francesco Canepa editing by Balazs Koranyip

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