Global Macro Service > Research Briefings > Eurozone

Solid pay rebound won’t trigger a wage-price spiral

We expect the solid recovery of the labour market and the lagged impact from the 2021 inflation surge to trigger a sharp pick-up in wage growth in the eurozone. According to our modelling, after slowing to a record low of 1.4% y/y in Q3 2021 and averaging only around 1.5% across 2021, negotiated wages will rise to 2.6% in 2022 – the highest rate for the eurozone since 2009.

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