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ECB predicts wage growth will slow sharply this year, with further interest rate cuts expected
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According to Jinshi Finance, the European Central Bank's main indicators for measuring future wage growth in the euro zone continue to show that wage growth will slow sharply in 2025, which supports hopes of a further decline in inflation, which will allow further rate cuts. The ECB’s wage tracking report released on Wednesday predicts that euro zone wages will grow at a rate of 1.5% per year by the fourth quarter of 2025. While this is up from the 1.4% forecast in December, it is also well below the peak of 5.3% recorded last year. The metric provides timely updates to decision makers with payroll data to help them evaluate how best to adjust their borrowing costs. They cut their deposit rate to 2.75% for the fifth time last week.
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