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European Union

ECB wage tracker points to slower euro-area pay growth in third quarter of 2027

A cooling in negotiated pay would ease pressure on the ECB as it deals with inflation tied to the Iran war.

Photo: Stephanie LeBlanc, Unsplash

What happened

The European Central Bank published an updated wage tracker on Wednesday that includes wage agreements signed up to the middle of October 2026 and extends its forward-looking horizon to the end of September 2027. European Central Bank The headline tracker stands at 2.7% for the second half of 2026 and 2.8% for the first half of 2027, then declines to 2.4% for the third quarter of 2027. Bloomberg+1 The tracker, which smooths one-off payments over 12 months, indicates negotiated wage growth of 2.3% for 2026. European Central Bank Excluding one-off payments, the tracker rises from 2.6% in 2026 to 2.8% for the first three quarters of 2027. European Central Bank

Around it

The projected readings are far below the 5.3% peak recorded in 2024. Bloomberg The slowdown is encouraging for the ECB as it battles inflation driven by the Iran war. Bloomberg Coverage of employees falls from 46.2% for 2026 to 31.8% for the first half of 2027 and 23.3% for the third quarter of 2027, so the latest figure rests on limited data. European Central Bank

Sources

  1. BloombergEuro-Zone Wage Growth to Slow Sharply Next Year in Boost for ECB
  2. European Central BankECB wage tracker suggests slightly higher wage growth in first three quarters of 2027 compared with the full year of 2026

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