A second round of pay raises may occur in the euro area, according to Gabriel Makhlouf, a member of the European Central Bank Governors Council, who also noted that high inflation may in some way be linked to this.
“With the high real earnings, there is some expectation of a second round of the consequences of inflation. What we hope is to avoid the occurrence of a third or fourth round of effects, as high inflation expectations become permanent,” Bloomberg News was quoted by the Irish Central Bank Governor Makhlouf as saying.
Makhlouf was addressing a conference in Nicosia, the capital of Cyprus, when his Cypriot colleague Konstantinos Herodoto remarked that there were no signs of a wage outbreak in Europe.
It is scheduled that the European Central Bank Governors Council will hold its periodic meeting next week, as analysts expect to approve a new increase in the main interest rates by 75 basis points..
Due to inflation, a member of the “European Central Central” Council anticipates a second round of pay.
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