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What will it take to bring down wage growth?

Although wage growth is clearly falling in the US, the same cannot be said for the UK and euro-zone despite some evidence of labour markets cooling there too. A further fall in inflation expectations and an easing in worker mismatches is probably needed for wage growth to slow. And while both seem to be happening to some degree, much slower progress than in the US means that monetary policy will need to stay tighter in Europe for longer.

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