ECB forecasts salary increase of up to 2.8% by 2027 and admits to further interest rate hikes

The European Central Bank (ECB) forecasts a moderate increase in wages in the eurozone, projecting a rise of 2.7% in the latter half of 2026 and 2.8% in early 2027. However, a slowdown to 2.4% is expected by the third quarter of 2027. This wage growth is crucial for the ECB's inflation analysis, especially amid rising energy costs that could lead to increased consumer prices and wage demands. The ECB has kept the deposit rate at 2.5% but may consider further interest rate hikes in December to combat inflation, which stood at 4% in October, driven by a significant rise in energy prices.