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Bibi comes back in Israel? Wage pressures in CEE

Israelis vote in elections next week and while polls point to a possible return for Benjamin Netanyahu (aka Bibi) as PM, another inconclusive result remains highly likely. The election has limited near-term implications for the economy, but a prolonged period of policy paralysis risks delaying much-needed supply-side reforms. Elsewhere, the latest wage data out of Central Europe underline the tightness of labour market conditions and although there are some signs of softening more recently, we think wage growth and inflation will fall back only slowly next year.

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