ECB Governing Council member points to new ECB tool to help policymakers track wage developments.
High euro area inflation has yet to feed into the latest pay increase data, Bank of Finland Governor Oli Rehn said in a speech Friday. But wage data’s status as a lagging indicator has prompted the European Central Bank to develop new tracking tools that will help guide future monetary policy decisions, he noted.
“The idea is to collect granular member-state-based data on negotiated wage growth, which would provide forward-looking information on future wages,” said Rehn, who also serves on the ECB's Governing Council.
With inflation running at multi-decade highs and at least starting to influence wage setters thinking, the ECB is following developments closely, particularly with unemployment across the eurozone at euro era lows of 6.7%. As for future policy considerations, Rehn was in line with comments from ECB Vice President Luis de Guindos earlier Friday that further hikes were likely in coming months, although he gave no indication of size.