ECB tracking indicator suggests wage growth will slow down in 2026

Golden Ten Data reported on May 6 that according to data released by the European Central Bank on Wednesday, although Middle East conflicts have led to higher energy prices, wage growth in the eurozone is expected to slow down this year. The European Central Bank wage tracking indicator shows that after a 3% increase in wages in 2025, this year's wages are expected to rise by 2.6%. The figure for 2026 is unchanged from the March forecast. European Central Bank officials have emphasized that the outcome of wage negotiations is a key indicator for judging whether rising energy prices will trigger inflation to consistently exceed its 2% target level. European Central Bank President Lagarde stated that close attention will be paid to the data, with in-depth research into upcoming wage negotiations and collective agreements. Last week, the European Central Bank kept its key interest rate unchanged but hinted that if the upward momentum in inflation since the end of February conflict continues, it might raise rates at the June meeting. The tracking indicator suggests there are currently no clear signs that wage agreements will exacerbate inflation this year.