Strong wage growth set to fuel another wave of inflation, warns ECB’s Philip Lane

The chief economist of the European Central Bank said wage growth across Europe will drive higher consumption and continued inflation next year

Philip Lane, chief economist at the ECB. Wage growth across Europe will be above 5 per cent this year and close to 5 per cent again in 2024. Picture: Bloomberg

Another wave of inflation is set to hit the European economy next year due to strong wage growth across the eurozone, Philip Lane, chief economist at the European Central Bank, has warned.

Speaking at an event in Dublin, Lane said there was “a lot of momentum” in wage negotiations across Europe, which he warned would drive a “prolonged second round effect” on inflation even at a time when energy and food prices are falling.

The ECB chief economist said wage growth would remain at elevated levels throughout next year before beginning to ease slightly from 2025