The European Central Bank’s latest wage tracker shows euro‑area salaries set to climb 2.6% annually in both Q3 and Q4, outpacing the first half of the year. The uptick follows a period of subdued raises as firms wrestled with soaring energy costs and lingering inflation pressures from the Iran conflict.

Analysts note that the projected pace still trails the 2024 peak of over 5%, but it exceeds the ECB’s own forecast of 2.9% for the full year. A recent ECB survey revealed companies expecting wage growth to ease to 2.8% next year, down from a 3.5% surge anticipated for 2025. These figures help the central bank gauge whether wage‑driven price pressures could force a policy shift.

Last week’s rate decision left the key interest rate at 2%, with President Christine Lagarde saying firms currently lack plans for large pay hikes. Yet memories of the 2022 price shock could spur workers to demand faster compensation, potentially nudging inflation higher and prompting the ECB to reconsider its stance.