Wage growth in the eurozone slowed to 4.12% in annual terms in the fourth quarter of 2024 after the highest growth since 1993 a quarter earlier, the European Central Bank (ECB) said on Tuesday.
In the third quarter, the increase in wages agreed by employers and trade unions was 5.43%. The data was revised up slightly – previously it was reported an increase of 5.42%.
The new data support the ECB’s assumption that wage growth will slow down after its pace matches the dynamics of consumer price growth. Ultimately, this should lead to a weakening of inflation in the service sector, which has been hovering around 4% for several months.
Eurozone companies also expect wage growth to slow to 3.6% in 2025 and 2.7% in 2026, according to a survey conducted by the ECB in mid-February. In 2024, wages grew by 4.3%.
Since June last year, the ECB has lowered key interest rates five times, and experts expect the central bank to cut borrowing costs again at its March 6 meeting.
