HomeEconomyAnalysis - Germany's 'very generous' pay deal could complicate ECB's inflation fight Economy Analysis – Germany's 'very generous' pay deal could complicate ECB's inflation fight By farahat April 24, 2023 0 60 views Share FacebookTwitterPinterestWhatsApp BARC +0.% Add/Remove from Watchlist Join the watch list Add location Location successfully added to: Please name your holding portfolio type: purchase Sell date: quantity: price Point value: Leverage: 1:1 1: 1: 1: 1: 1: 12 1: 1: 17 1: 17 Committee: Create New Watchlist Create 2025400 2025 1000 Create a new holding portfolio Add Create 2021 + Add another position to close By Francesco Canepa and Balazs Koranyi FRANKFURT (Reuters) – Germany’s public A “very generous” pay rise for sector staff could complicate the ECB’s fight against inflation. The proposed deal would give 2.5 million workers in Europe’s largest economy a permanent 5.5% boost next year, in addition to next year’s A series of one-time payments for months to help them cope with the surge in living costs. This would set an important precedent for other wage negotiations and could threaten the ECB’s forecast that wage growth will peak this year, which underpins the lowered its expectations for eurozone inflation back to the central bank’s 2% target 200. “A permanent increase next year may cause some concern for the ECB as wages are supposed to Peaked this year,” said Natixis economist Dirk Schumacher. Gilles Moec, chief economist at French insurer Axa, called the proposed deal “very generous”, Economist Mark Cus Babic 1000 Barclays (London: 200BARC), saying it “could significantly boost aggregate wage growth”. ECB expects overall wage growth in Euro currency The average growth rate of the country this year is 5.3%, which will drop to 4.4% next year, and will drop to 3.6%. but Europe The central bank’s description of its March meeting suggested the forecast was challenged by some policymakers when it was presented to them last month as too dovish. 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% . ” which means that it will take at least five years for public sector wages to make up for the loss of purchasing power and the standard of living of employees to reach 25,” Fratzscher said. 100 Share FacebookTwitterPinterestWhatsApp Previous articleFormer 'Dancing With the Stars', 'Strictly Come Dancing' Judge Len Goodman Dies at 78Next articleKen Loach Says 'Old Oak' Could Be His Last Feature Film (Exclusive) farahat RELATED ARTICLES Economy Most EU countries oppose network fees on big tech firms, sources say June 3, 2023 Economy U.S. ends Mexico airspace review, but no ruling yet June 3, 2023 Economy Biden praises debt ceiling deal for 'avoiding crisis' in first Oval Office speech June 2, 2023 LEAVE A REPLY Cancel reply Comment: Please enter your comment! Name:* Please enter your name here Email:* You have entered an incorrect email address! Please enter your email address here Website: Save my name, email, and website in this browser for the next time I comment. USA Trends Messi-mad Indian mom driving to Qatar to see hero in his final World Cup December 7, 2022 Drew Brees fakes lightning strike in promotional stunt for online sportsbook December 3, 2022 Who could be speaker, if not Kevin McCarthy December 3, 2022 3 bold Utah football predictions for Pac-12 Championship vs. USC December 3, 2022 Load more LAST NEWS Sevey can't fix Dodgers' problems as Yankees' series opener June 3, 2023 Anime Expo Hosts BONES Co-Founder, Manga Creator Kafka Asagiri, VTuber Group LazuLight June 3, 2023 How to win at Online Casino Slots June 3, 2023 Cole has a solid season for the Dodgers June 3, 2023 Load more Featured NEWS Bills OC Ken Dorsey blasts at end of game after loss to Dolphins: 'Here's something I definitely have to learn from' September 27, 2022 The 20 Best Women's Bomber Jackets for Fall 2022 September 1, 2022 The Witch's Marriage Comics May 28, 2023 Sean Strickland fights Jared Cannonier: 'It won't be boring' August 27, 2022 Load more
