Lagarde says wages show no material response to energy shock
The ECB president's remark backs the bank's view that second-round effects from the energy shock remain limited.
Published
European Central Bank President Christine Lagarde said on Monday that wages are showing no material response to the recent energy shock.
Earlier in the day, Lagarde flagged upside risks to inflation and downside risks to growth amid high uncertainty, while saying she expects economic resilience to continue into the third quarter.
The comment follows remarks on Friday from ECB Governing Council member Boris Vujcic, who said the central bank has started a tightening cycle after two rate increases this year, with traders pricing in several more hikes through 2027.
Lagarde's comment reinforces the ECB's existing read on second-round effects, a threshold the bank watches closely in its rate decisions. With wage growth still muted despite the energy shock, the risk of a wage-price spiral remains contained, a point that supports a measured approach to tightening rather than an aggressive one. The ECB has described its meetings as live, meaning December and beyond remain open calls.