Finance
ECB expects wage growth to ease considerably this year
Published by Global Banking & Finance Review®
Posted on April 23, 2025
2 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on April 23, 2025
2 min readLast updated: January 24, 2026
The ECB forecasts a significant slowdown in euro zone wage growth, crucial for inflation insights. Wage growth is expected to ease to 3.1% by 2025.
FRANKFURT (Reuters) -Wage growth in the euro zone is expected to ease considerably this year, according to data from the European Central Bank released on Wednesday.
The ECB's wage tracker, which covers active collective bargaining agreements, sees wage growth with smoothed one-off payments slowing to 3.1% in 2025 after 4.8% in 2024.
Wage development in the 20-country currency bloc offers key insights into inflation for the central bank, which last week cut interest rates for the seventh time in a year as it steers towards its 2% inflation target.
The ECB has offered few signals about future moves, although it has warned that erratic U.S. trade policy is bound to weigh on growth.
Excluding one-off payments, the downward trend in wage growth is less pronounced, at 3.8% this year following 4.2% in 2024, according to the ECB.
Wages in the euro zone have had a boost in recent years as workers called for compensation to offset high inflation, which reached double-digits for a spell in 2022 following the invasion of Ukraine and the resulting drop-off in energy imports from Russia.
Inflation has since fallen considerably, coming in at 2.2% for the euro zone in March.
(Reporting by Frank Siebelt, Writing by Rachel More; editing by Matthias Williams)
The main topic is the expected slowdown in wage growth in the euro zone as forecasted by the ECB, and its implications for inflation.
Wage growth in the euro zone is expected to slow to 3.1% by 2025, down from 4.8% in 2024.
The ECB is steering towards a 2% inflation target, adjusting interest rates accordingly.
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