ECB Faces Pressure on Inflation as Wage Growth and Labor Supply Decrease

The European Central Bank (ECB) is facing pressure on inflation due to lively wage growth and decreasing labor supply, according to ECB's Nagel. Nagel also mentioned that there are risks that the inflation outlook could turn out higher than expected. ECB's Lane stated that although there is some progress on underlying inflation, it is not enough. ECB's Makhlouf emphasized that it is too early to start talking about cutting rates. ECB's Kazaks mentioned that further rate hikes may be needed. ECB's Wunsch stated that risks are tilted towards higher inflation and growth risks are tilted to the downside. ECB's Villeroy noted that inflation is clearly trending downward. ECB's De Guindos stated that any talk of rate cuts is premature and there are risks for the inflation outlook in the next months. ECB's Vujcic and Centeno also mentioned that it is too early to consider rate cuts and monetary policy is working to help inflation come down.