European Central Bank chief economist Philip Lane stated Monday that the ECB is confident that wage growth is returning to normal.
The official noted that it is desirable and inescapable that the euro area has several years of wage increases above a normal level but stressed that the ECB needs to make sure that it returns to normal. "It’s a normalisation process," Lane said.
The ECB's chief economist also pointed to good progress on inflation, adding that it should stabilise around the ECB's 2% target in next year and the year after. “This is a good baseline," Lane said and revealed that the ECB's policymakers decided that they need to keep on checking this assessment in these weeks from their latest meeting. "If this assessment is confirmed, then we will start looking more closely at reversing some of the rate increases we’ve made,” the official added.