The European Central Bank (ECB) released its updated wage tracker this week, indicating that negotiated wage pressures remain stable as the year progresses.

Data covering agreements signed up to the end of May 2026 suggests that negotiated wage growth will reach approximately 2.6 per cent by the end of December 2026.

The headline indicator, which uses smoothed one-off payments to describe quarterly and monthly dynamics, shows growth of 3.2 per cent for 2025 and 2.3 per cent for 2026.

For 2026, this headline tracker averages 1.8 per cent in the first quarter, 2.1 per cent in the second quarter, and 2.6 per cent for the final two quarters of the year.

The increase observed over the year reflects the fading mechanical downward effect of large one-off payments that were distributed in 2024 but not in 2025.

This specific mechanical effect is expected to disappear almost entirely over the course of 2026 within the headline indicator.

The ECB wage tracker with unsmoothed one-off payments, which is better suited for describing yearly dynamics, indicates negotiated wage growth of 3.0 per cent in 2025 and 2.6 per cent in 2026.

Meanwhile, the wage tracker excluding all one-off payments points to an easing of negotiated growth from 3.8 per cent in 2025 to 2.6 per cent in 2026, reflecting more moderate dynamics in negotiated base wages.

Employee coverage for the 2026 data currently stands at 46.4 per cent for the first quarter, 44.8 per cent for the second, 41.1 per cent for the third, and 40.4 per cent for the final quarter.

The forward-looking horizon for the tracker remains fixed at the end of December 2026 for this release.

As new agreements are signed and coverage for contracts extending beyond 2026 increases, the horizon will be extended to the first quarter of 2027 in the July 2026 data release.

The bank cautioned that the tracker is subject to revision and its forward-looking component should not be interpreted as a formal forecast since it only captures currently available information from active collective bargaining agreements.

For a more comprehensive assessment of euro area wage developments, the bank pointed towards the June 2026 Eurosystem staff macroeconomic projections, which indicate a yearly growth rate of compensation per employee of 3.2 per cent for 2026.