The ECB Should Disregard High German Wage Growth… For Now 

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Inflation crawling back to target? 

After the massive inflationary surge in recent years, inflation numbers in the Eurozone have been normalizing again over the last year and have been hovering just over 2.5% in recent months, edging closer to the ECB’s two percent inflation target. 

The minor setback this spring was to be expected and is related to some one-off factors temporarily driving inflation higher. In Germany, service price inflation increased because the government’s railway fare reduction measure (introduced in May 2023) has ended. In Spain, electricity prices surged because the government’s VAT reduction for energy (introduced

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