ECB: Wage Tracker confirms wage growth will slow to 2.3% in 2026

The ECB’s wage tracker, one of the indicators most closely monitored by the Frankfurt-based institution to assess inflation trends, confirms that wage pressures are set to ease in 2026 compared with last year. According to the ECB’s main indicator, which takes into account current collective agreements and spreads the effect of one-off payments over time, negotiated wage growth is expected to be 3.2% in 2025 and 2.3% in 2026. Compared with the May publication, the estimates for 2026 remain largely unchanged. The indicator, which does not smooth out one-off payments over time, shows wage growth of 3.0% in 2025 and 2.6% in 2026. Excluding one-off bonuses entirely, growth in negotiated wages slows from 3.8% in 2025 to 2.6% in 2026.

The quarterly profile of the main wage tracker shows wage growth of 1.8% in the first quarter of 2026, 2.1% in the second quarter, and 2.6% in the third and fourth quarters. The acceleration over the course of the year mainly reflects the gradual fading of the technical effect resulting from the high one-off payments made in 2024 but not repeated in 2025. The ECB expects this technical effect to disappear almost entirely during 2026. Overall, the data confirm the trend towards a cooling of wage dynamics in the euro area, a factor that the ECB considers crucial for assessing the persistence of inflationary pressures in the medium term.

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