Wages could keep pressure on euro zone inflation for years, ECB's Lane says

© Reuters. FILE PHOTO: European Central Bank Chief Economist Philip Lane speaks during a Reuters Newsmaker event in New York, U.S., September 27, 2019. REUTERS/Gary He

FRANKFURT (Reuters) – Euro zone wages will take years to adjust to changed economic circumstances so could put pressure on inflation long after the energy and pandemic shocks fade, European Central Bank chief economist Philip Lane said on Friday.
“The staggered nature of wage setting means that the adjustment of nominal wages to the cumulative increase in the cost of living will play out over several years,” Lane said in a blog post. “This means that, even after energy and pandemic factors fade out of inflation measures, wage inflation will be a primary driver of price inflation over the next several years.”