Olli Rehn, Governor of the Bank of Finland and member of the ECB Governing Council, stated on August 19 that wage growth has remained moderate with no clear signs of second-round effects on prices. Negotiated wage growth across the euro area is stabilizing around 2.6% for 2026, down from roughly 3% in 2025. In the first quarter of 2026, negotiated wages rose 2.46% year-on-year, compared to 2.89% in the fourth quarter of 2025. This trend reinforces expectations for a patient monetary policy stance, giving the ECB less reason to keep rates elevated. Second-round effects refer to wage-price spirals, a scenario central banks have been closely monitoring since inflation surged in 2022.
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