Increased a basic measure of growth of wage In the eurozone, intensifying ECB’s cautiousness for European Central Bank interest rates (ECB) about the further reduction of interest rates.
Conventional salaries of the second quarter increased by 4% compared to a year ago, the ECB said today (22.8.25). This is increased from 2.5% in the first three months of the year, although it is still below the high 5.4% recorded in 2024, according to Bloomberg.
The ECB’s confidence in stabilizing inflation at 2% is based on the retention of wage increases and the decline in increasing prices in the sector of labor services – which is still stuck close to 3%.
Its own salary monitoring system for the eurozone of 20 states marks a significant retreat at the beginning of next year. While Bundesbank has reported a strong boost to German wages this quarter, it also sees a weakening in the future “due to the reduction of inflation rates and the weak economic environment”.
The ECB is widely expected to maintain the basic deposit rate at 2% when it meets again after its summer vacation in September, extending a pause last month after an annual reductions campaign.
Most officials see interest rates in good condition, on a level that neither restricts nor supports economic activity. Some, however, have suggested that no further reductions be ruled out.