How worrying is German wage inflation?

In our view, the concerns which were raised again this week about a wage-price spiral in Germany look overdone. The Indeed tracker suggests that wage pressures have eased since late 2022 and there are plenty of signs that the labour market is not as tight as it was a year ago. Meanwhile, we expect to learn next week that the euro-zone Composite PMI fell further in August and we think the Riksbank will cut its key policy rate to 3.5%.