The increase in wage In Germany it accelerated in the second quarter, with salaries recording a 5.7% increase on a year, compared to just 0.9% in the previous quarter, according to its monthly report Bundesbank published today (21.8.25).
This is mainly due to the highest permanent increases in the sectors of retail and wholesale, as well as to public services, the Central Bank said. Excluding the impact of special inflation payments, there was a 6.7% increase in wages in the second quarter – in line with the previous period, although recent agreements indicate lower increases in the future, according to Bundesbank.
At the same time, the Central Bank stressed that recent collective agreements show less intense wage increases and that new contracts by the end of the year are expected to be lower than last year “due to the reduction of inflation rates and the weak economic environment.”
An index for the negotiating salaries in the eurozone, which will be published on Friday, will be closely monitored by European Central Bank officials who will weigh the next steps on interest rates. They are based on a further decrease in wage growth, which will reduce the still high inflation in services by about 3%.
Policy -executives are widely expected to maintain the basic deposit rate at 2% when they meet again after their summer vacation in September, extending a pause last month after an annual cuts campaign.