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ECB's Rehn: Wage growth moderate, no clear second-round inflation effects

Created at 19 Aug · 7:18 AM1 source↑ Market-relevant
IN SHORT

European Central Bank policymaker Olli Rehn stated that wage growth and its outlook remain moderate, with no clear signs of second-round inflation effects. He emphasized the importance of anchoring inflation expectations to maintain this trend ahead of the ECB's September 10 monetary policy announcement.

Who's Involved

Olli Rehn
European Central Bank policymaker and governor of Finland's central bank
ECB
European Central Bank
Finland's central bank
Central bank of Finland
ECB's Rehn: Wage growth moderate, no clear second-round inflation effects

↳ Why This Matters

These comments from a key ECB policymaker suggest a potentially less aggressive stance on future interest rate hikes, as moderate wage growth reduces the risk of a wage-price spiral that could entrench inflation. This could influence market expectations for the ECB's upcoming monetary policy decision.

Key facts

  • European Central Bank policymaker Olli Rehn said wage growth and its outlook have remained moderate.
  • Rehn highlighted the absence of clear signs of second-round effects.
  • He stressed that anchoring inflation expectations is essential to maintain this trend.
  • The ECB's next monetary policy announcement is scheduled for September 10.

European Central Bank policymaker Olli Rehn stated on Wednesday that wage growth and its outlook have remained moderate, with no clear signs of second-round effects. Rehn, who also serves as the governor of Finland's central bank, emphasized in a written speech that anchoring inflation expectations is essential to ensure this trend continues.

The ECB's next monetary policy announcement is scheduled for September 10.

Frequently asked questions

Second-round effects refer to the phenomenon where initial price increases (first-round effects) lead to demands for higher wages, which in turn lead to further price increases, creating a wage-price spiral that can entrench inflation.

Olli Rehn is a policymaker at the European Central Bank and the governor of Finland's central bank.

The next European Central Bank monetary policy announcement is scheduled for September 10.

What Happens Next

01ECB's next monetary policy announcement on September 10.
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How It Developed

ECB policymaker Olli Rehn stated wage growth remains moderate.
Rehn noted no clear signs of second-round inflation effects.
He stressed the importance of anchoring inflation expectations.
The ECB's next monetary policy announcement is scheduled for September 10.

Sources

T1
ECB's Rehn says wage growth remains moderate, no second-round effectsReuters
T2
Anchoring Inflation Expectations: ECB's Wage Growth Stancedevdiscourse.com
T2
ECB's Rehn Warns of Forceful Rate Hikes on Wage Growthpropfirmscan.com

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