ECB signals modest wage growth for the first half of 2027

The European Central Bank has refreshed its wage-tracking database, now covering agreements up to the end of August 2026 and extending its forecast window to the end of June 2027. Based on this data, the ECB expects negotiated wages to rise modestly during the first half of 2027. Wage trends remain a central factor in the bank’s inflation projections, following a recent increase in the deposit rate for banks.

Lagarde pointed out that higher labour productivity has limited the acceleration of unit labour costs. The bank also warned that persistent high inflation could continue if energy price pressures eventually feed through to wages and other prices. Analysts see the modest wage outlook as a factor that may influence future monetary-policy decisions.