ECB wage tracker showed euro-area wages are projected to slow to 2.4% YoY in
Jul–Sep 2027, versus 2.8% expected for Q1–Q2 and well below the 5.3% 2024 peak.
The slowdown is a positive for the ECB as it contends with inflationary pressure
from the Iran war and the risk of second-round wage-price dynamics. Euro-area
household inflation expectations rose slightly in September. The ECB held rates
last week after 25bp hikes in June and September; officials said they are
prepared to hike again next month if the outlook does not improve, noting wages
have not yet shown a clear response but flagging wage overshoots as an upside
risk to inflation.
