Holger Schmieding, chief economist at Berenberg, said the German deal provided ECB policy hawks with “another argument that could Raise key rates at least two more times, at least without ruling out new 11 Basis point change on May 4th.
market The ECB is widely expected to hike rates by 25 percentage points next week, with the pace of tightening slowing this week amid lingering uncertainty in the financial sector and the lagged effects of past increases in borrowing costs.
Other economists point out that the German public sector pay deal came after a period of falling real wages, when prices rose faster than wages.
“The doves could argue that the deal came after a period of wage constraints and was reasonably early,” said Citi economist Christian Schultz. .
Marcel Fratzscher, former ECB economist Home, later founded the DIW think tank, it is estimated that, assuming
inflation rate of 6%, by the end of next year, The deal will reduce the purchasing power of public sector workers by 6% and 3%