The European Central Bank's chief economist Philip Lane said on Friday that he thinks that wages will be the primary driver of inflation over the coming years.
According to him, the staggered nature of wage setting means that adjustment of nominal wages to the cumulative increase in the cost of living will play out over several years. “Even after energy and pandemic factors fade, wage inflation will be a primary driver of prices in the next several years,” the official added.
Meanwhile, Lane noted that long-term inflation expectations appear well-anchored.