Central Banks
ECB’s Goldilocks Inflation Vision Tested by Data Drip Feed
- Officals hope wages will fuel economic bounce but not prices
- Pay data due in coming months will be crucial for rate path
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The European Central Bank’s hope that euro-zone wages rise just enough to fuel economic expansion, without reigniting inflation, will be put to the test by a slow drip of data releases that will determine when interest rates can safely be lowered.
While new quarterly projections to be unveiled at this week’s policy meeting will reveal a slightly softer outlook for prices, the focus of officials is squarely on salaries, which are still advancing at more than double the 2% inflation target.