MNI BRIEF: Low Productivity Behind Inflation Revision-Guindos

Lower productivity alongside a rise in energy prices were behind the upward inflation revisions in the European Central Bank economic projections presented last Thursday, ECB’s vice president Luis de Guindos said Monday.

Wages across the euro area have evolved in a similar way to what the ECB saw in June, but productivity is “more moderated”, de Guindos said.

“Productivity is declining,” he said, noting that if it can’t pick up with 5% wages increases, then the result will be higher unit labour costs. The poor productivity performance of could be related to regulatory aspects, he said.