New data release: ECB wage tracker continues to suggest negotiated wage pressures easing in 2026

Press release: The European Central Bank’s latest wage tracker update points to easing negotiated wage pressures across the euro area in 2026, reinforcing the view that wage growth is gradually normalising after a period of elevated inflation-linked settlements.

Using wage agreements signed up to the end of February 2026, the ECB said its headline wage tracker, which smooths one-off payments over 12 months, shows negotiated wage growth at 3.2% in 2025 and 2.3% in 2026. The version with unsmoothed one-off payments, which the ECB says is better suited to annual comparisons, shows 3.0% in 2025 and 2.6% in 2026. Excluding one-off payments entirely, negotiated wage growth is also seen easing to 2.6% in 2026 from 3.9% in 2025.

Compared with the ECB’s February 2026 release, the 2026 figures were revised down by 0.1 percentage points across the main forward-looking measures.

The central bank said available information continues to suggest negotiated wage growth will stabilise at around 2.6% by the end of 2026. On the headline measure, wage growth is expected to average 1.9% in the first quarter of 2026, rising to 2.1% in the second quarter, 2.5% in the third quarter and 2.6% in the fourth quarter.

According to the ECB, this increase over the course of the year is largely driven by statistical effects linked to the treatment of earlier one-off payments rather than fresh wage pressure. Those effects are expected to fade as the year progresses.

The unsmoothed measure also points to a more stable wage outlook than in previous years, with quarterly averages of 2.9% in the first quarter, 2.6% in the second, 2.4% in the third and 2.5% in the fourth. The indicator excluding one-off payments remains close to 2.6% throughout the year, suggesting more moderate growth in base wages.

Coverage remains an important caveat in reading the data. The tracker’s employee coverage falls over the forward-looking horizon as not all 2026 agreements have yet been signed, standing at 44.1% in the first quarter, 41.3% in the second, 37.1% in the third and 36.3% in the fourth quarter.

The ECB said the wage tracker’s forward-looking horizon will remain at December 2026 for this release and is expected to extend into the first quarter of 2027 in the July 2026 update as additional agreements are signed.

The central bank also reiterated that the wage tracker should not be treated as a forecast. It reflects only currently active collective bargaining agreements and remains subject to revision. The ECB added that negotiated wage growth is only one part of broader labour cost developments, which are also shaped by employment composition, bonuses and hours worked.

For a broader view, the ECB’s March 2026 staff macroeconomic projections point to compensation per employee in the euro area growing by 3.4% in 2026.

About the ECB

The European Central Bank is the central bank of the euro area and is responsible for monetary policy across the single currency bloc. Its wage tracker is a joint Eurosystem initiative involving the ECB and nine euro area national central banks, drawing on collective bargaining agreement data from Belgium, Germany, Greece, Spain, France, Italy, the Netherlands, Austria and Finland to assess wage pressures across the region.

Why This Matters to FinanceX Readers

For markets, lenders and policy watchers, the latest wage tracker adds to evidence that domestic inflation pressures may be easing in the euro area. Wage growth remains a critical input for ECB rate expectations, particularly as policymakers assess whether inflation is returning sustainably to target. The latest data suggest that while labour costs remain elevated, the pace of wage settlements is becoming more consistent with a more stable inflation environment.