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Eurozone wages record unprecedented annual growth in Q1

Eurozone wages record unprecedented annual growth in Q1

Mubasher: Eurozone wages grew in the first quarter of this year at the highest momentum ever recorded since the beginning of data gathering, official figures showed on Monday.

Wages and salaries rose by 2.5% in the three-month period ended last March, compared with the same quarter of the preceding year, marking the highest growth pace since 2010, the European Union’s (EU) statistical office, the Eurostat, said. In the prior two quarters, wages posted a 2.3% gain.

While wage growth is a positive signal for the European Central Bank’s (ECB) plan to drive inflation up close to its target, it was not manifested so far in higher prices across the 19-country bloc.

Wage growth outpaced an increase of 2.4% of the overall labour costs in the first quarter, the Eurostat said.

The non-wage component of labour costs rose by 2.2%, wiping out the growth in wage expenses.

Despite wage surge and record high employment, consumer prices came repeatedly softer than expected, while underlying inflation remained weak.

During the first quarter, Eurozone inflation rose to the maximum level of 1.5% in February, with 1.4% gain in January and March, but last month, inflation eased to 1.2%.

By 11:30 am GMT, the EUR/USD pair ticked down by 0.10% to $1.1219.