Brussels, Belgium. The European Central Bank said negotiated wage pressures across the euro area are expected to remain broadly stable through 2026 and into early 2027, based on collective bargaining agreements available in early July.
Separate data from Cyprus showed that workers’ earnings continued to rise in the first quarter, although most employees earned below the national average.
Wage tracker data
The ECB’s latest wage tracker, updated with agreements signed up to the first week of July 2026, showed negotiated wage pressures, including smoothed one-off payments, at 2.3 per cent for 2026.
The figure is based on agreements covering 44.3 per cent of employees in participating countries. It is projected to rise slightly to 2.7 per cent in the first quarter of 2027, with current coverage at 28.4 per cent.
The central bank extended the tracker’s forward-looking horizon to March 2027. It said the September 2026 update would extend coverage into the second quarter of 2027 as further wage agreements are concluded.
Assessment and projections
Compared with its June 2026 release, the ECB said the latest data left its assessment of negotiated wage pressures largely unchanged, indicating that newly signed agreements had not materially altered the outlook for the year.
The ECB said the tracker should not be interpreted as a forecast because it reflects only active collective bargaining agreements currently available and may be revised as new agreements are signed.
It also noted that the tracker does not precisely replicate its negotiated wage growth indicator, meaning differences between the two measures are expected over time.
For a wider assessment of labour costs, the ECB referred to the June 2026 Eurosystem staff macroeconomic projections, which forecast compensation per employee across the euro area to increase by 3.2 per cent in 2026.
One-off payments
The headline wage tracker, which smooths one-off payments including inflation compensation, bonuses and backdated pay over a 12-month period, averaged 1.8 per cent in the first quarter of 2026, 2.1 per cent in the second quarter and 2.6 per cent in both the third and fourth quarters.
According to the ECB, the gradual increase mainly reflects the fading statistical effect of large one-off payments made in 2024 but not repeated in 2025. That mechanical effect is expected to almost disappear during the second half of 2026.
By the first quarter of 2027, the headline indicator is expected to reach 2.7 per cent, with one-off payments playing a limited role.
