European Central Bank (ECB) policymaker Olli Rehn, who also serves as the governor of Finland’s central bank, said on Wednesday that wage growth across the euro area has stayed moderate and that there are no obvious second‑round effects that could push inflation higher.

Wage outlook remains steady

In the written copy of a speech, Rehn noted that the current wage outlook does not indicate a rapid acceleration that could feed into broader price pressures. He highlighted that keeping inflation expectations well‑anchored will be essential to maintain this stability.

Implications for monetary policy

Rehn’s comments come as the ECB prepares for its next monetary‑policy announcement, scheduled for September 10. By stressing the importance of anchored expectations, he signals that the central bank remains vigilant about any signs of inflationary momentum that could arise from higher wages.

Context for the euro area

The eurozone has been navigating a period of elevated inflation following the pandemic and energy‑price shocks. While price growth has begun to ease, policymakers continue to monitor wage dynamics closely, as sustained wage increases could translate into higher consumer spending and, ultimately, price rises.

What’s next?

Analysts will be watching the ECB’s September decision for clues on whether the central bank will adjust interest rates or maintain its current stance. Rehn’s remarks suggest that, for now, the institution sees no immediate need to tighten policy solely on the basis of wage developments.

Reporting by Anna Ringstrom; editing by Terje Solsvik.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.