BRUSSELS—Europe’s top central banker says he expects the improving labour market to eventually push up wages and inflation toward target.
European Central Bank President Mario Draghi told European lawmakers Monday that there are a number of reasons why wages have not risen markedly despite the region’s economic recovery.
He said there’s a possibility that the recent era of low inflation has capped wage demands and that the priority of wage negotiators has been to secure jobs.
However, he said that these kinds of factors are likely to be “transitory” and the recent “remarkable” increases in employment will soon be seen in higher wages. A pick-up in wages should push prices higher.
The eurozone’ annual inflation rate of 1.4 per cent remains below the ECB’s target of just below 2 per cent.