Wages rise but will inflation follow?
The 2% wage growth in the Eurozone in the second quarter of 2017 has surpassed market expectations, a signal that the inflation rate could pick up in the months to come. However, reaching the European Central Bank’s (ECB) inflation target may be further away than we think.
The first half of 2017 showed sluggish but positive growth for the Eurozone economy, with a slight uptick of 0.5% and 0.6% in the first and second quarter of the year respectively. This continues the trend of improving economic performance visible in Europe at least since the last quarter of 2016, when, growing 0.5% in that quarter alone, the Eurozone’s GDP growth surpassed that of the United States’ (US) for the first time since 2008. With the uncertainty created by the recent eventful election cycle in European economies nearly complete, it appears that some much-needed stability is settling on the Eurozone.
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