Wage Growth in Germany Corresponds to ECB Inflation Scenario
Last week, members of the trade union IG Metall held a series of round-the-clock strikes to encourage companies to cooperate. The IG Metall trade union and the Federation of Employers of Suedwestmetall reached an agreement on a 4.3-percent growth in wages.
ECB Chief Economist Peter Praet said that the basic wage growth, provided by Germany's largest union this week, is fully in line with the inflation projections of the European Central Bank. These comments weakened the assumption that wage growth in Germany could force the ECB to raise its inflation forecasts and tighten the policy faster than markets expect.