MNI BRIEF: Wages Surprise, But Still Seen Slowing - Lagarde

Wage growth across the eurozone has surprised to the upside, but the European Central Bank’s Governing Council still expects moderation by the end of 2026, President Christine Lagarde said Thursday.

There is a trend for sticky services inflation "that we look at carefully," Lagarde said. "A lot of that is related to wages, which have surprised us somewhat to the upside. However, we still anticipate that wages will follow a declining trend be lower at the end of 2026," she added.

"But we are attentive," Lagarde said. "When we believed that all of the catch-up passed. We were surprised, but we must take note. That has been reflected in the projections".

Earlier Thursday, the European Central Bank left its key interest rates unchanged  and confirmed in an updated economic assessment that inflation should stabilise at the 2% target in the medium term. (See MNI ECB WATCH: Rates On Hold, Eyes On Projections, Language)