Despite the focus on r* recently at the ECB, we think that wage inflation will be a more important guide for monetary policy. And the ECB’s wage tracker released earlier this week suggests that wage growth will slow significantly this year, supporting our view that services inflation will ease and that the ECB rate cutting cycle has further to run. Meanwhile, a big jump in core inflation in Sweden in January reinforces our view that the Riksbank will not cut its policy rate in the foreseeable future, keeping it on hold at 2.25%.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.