Central Banks
ECB’s Inflation Endgame at Risk Over Productivity Challenge
- Outlook for wages, profits, productivity must prove correct
- Officials to keep rates on hold while they await more data
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A key plank in the European Central Bank’s case for inflation returning to 2% faces growing skepticism — potentially damping hopes for sustained cuts in interest rates.
For consumer-price gains to retreat to the ECB’s target as envisaged late next year, an increase in productivity must accompany moderations in workers’ pay and company profit margins.