European Central Bank policymaker Olli Rehn said on Wednesday that wage growth in the euro area has remained moderate, with no clear evidence of second-round inflation effects.
Speaking at an event in Stockholm, Rehn, who also serves as governor of Finland’s central bank, stressed that anchoring inflation expectations is critical to sustaining the current pace of wage increases. He noted that the absence of second-round effects—where rising wages drive broader price pressures—helps mitigate risks to the inflation outlook.
The ECB’s next monetary policy decision is scheduled for September 10, with policymakers closely monitoring labor market dynamics and their impact on inflation. Rehn’s remarks align with the ECB’s broader focus on ensuring price stability while balancing economic growth.
The central bank has previously warned that sustained wage growth could fuel inflation if not properly managed, but Rehn’s comments suggest a measured approach at present.
