- We need to move further along the disinflationary path
- Average wage growth in 2024 fell from 4.4% from January meeting to 4.2% in March meeting
- Latest data suggests wages are growing in a way that is compatible with inflation reaching the ECB's target
- Will get a clearer picture in the coming months
- Expect to have two important pieces of evidence to raise confidence level sufficiently for first policy move
- If the data shows sufficient alignment between inflation path and ECB projections, then can dial back on current policy cycle
It is what we already know for the most part. The negotiated wages data for Q1, which will be released in late May, is going to be a key one to watch in this regard. You can refer to the Q4 data here. The headline remark might be one that not just applies to the ECB, but for all major central banks at the moment.