Bankinter | The ECB’s Wage Tracker shows an expected wage increase of 1.7% for the first half of 2026 against 2.1% in the second half of 2025 and 4.3% in the first half of 2025.
Analysis team’s view: Good news for inflation in Europe. The ECB’s Wage Tracker is a tool developed by the ECB and the national central banks of the Eurosystem to monitor wage pressures in the euro area, especially in the context of monetary policy. It collects data from collective agreements already signed between trade unions and business associations. Inflation is no longer the ECB’s main concern. Inflationary pressures are easing thanks to the strength of the euro, falling energy prices and wage moderation. The CPI for September stood at 2.0% (in line with the ECB’s target), with the core rate at 2.3% (against 2.7% in December 2024). The euro has strengthened against the dollar by 14.7% so far this year and oil has fallen by 8%. These factors will continue to favour a decline in goods inflation. Wage moderation allows us to remain optimistic about the evolution of services inflation. In addition, inflation expectations (both surveys and market data) remain well anchored. The five-year inflation swap stands at 2.0% and the 10-year German inflation breakeven at 1.8%.
