ECB’s Lane sees easing labour market stress
FILE PHOTO: The building of the European Central Bank (ECB) appears on the horizon during sunset in Frankfurt, Germany, December 2, 2023. REUTERS/Wolfgang Rattay/File Photo
FRANKFURT (Reuters) – The euro zone’s labour market is finally cooling and firms are becoming less concerned about worker shortages, European Central Bank chief economist Philip Lane told a university lecture on Friday.
Rapid wage growth, in part due to record low unemployment, has been a key drive of domestic inflation in recent years and the ECB has been hesitating to cut interest rates, looking for more evidence that wage inflation is coming under control.
“We do think the labour market is softening in many ways,” Lane said at the Imperial College Business School in London. “Vacancy rates … are coming down and firms are no longer as fearful about labour shortages.”
