European Central Bank Executive Board Member, Peter Praet, speaks during a conference in Sofia, Bulgaria, May 24, 2017. REUTERS/Stoyan Nenov
February 8, 2018
FRANKFURT (Reuters) – A benchmark salary increase secured by Germany’s largest trade union this week is “fully in line” with the European Central Bank’s inflation forecasts, the ECB’s chief economist Peter Praet said on Thursday.
His comments dampened speculation that the 4.3 percent pay rise negotiated by labor union IG Metall and the Suedwestmetall employers’ federation – which is seen as heralding greater wage growth in the rest of Germany – would prompt the ECB to raise its inflation forecasts and to tighten policy faster.
“(The pay rise is) fully in line with our baseline scenario for inflation,” Praet said during a question and answer session on Twitter.
(Reporting By Francesco Canepa; Editing by Gareth Jones)