Tuesday, July 23, 2024

Higher wages against inflation, which is why the European Central Bank opposes it

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there The European Central Bank is against wage increases: This is not new, but in the latest official release of the Central Bank, the task seems clearer. The observation of the evolution of eurozone workers’ pay scales is accurate. As Money.it shows, workers’ wages, and specifically their dynamics in the short/medium term, are crucial for inflation and ECB policy.

ECB President Lagarde explained the reason for this focus on workers’ wages and weight, warning that wages in the eurozone are rising faster than previously expected and the ECB must prevent this from adding to already high inflation. in the coin block.

In his own words: “We know that wages are rising, perhaps faster than expected. We must not allow inflationary expectations to become unfettered or for wages to have an inflationary effect… We must be careful that the internal causes we see [cause della crescita dei prezzi]which mainly relate to fiscal measures and wage dynamics, do not lead to inflation consolidation.

The point is that as wages rise, so does the purchasing power of consumers in general, and thus, demand for goods and ultimately inflation. An operation, the latter, that the European Central Bank is watching carefully to avoid further pressure on prices, which are still very high.

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