ECB’s Escriva says second-round wage inflation effects have not appeared

José Luis Escrivá, Governor of Banco de España and a member of the ECB Governing Council, noted that second-round effects on wages have not yet appeared. In plain terms: the fear that rising energy and supply-shock costs would spiral into higher wages, which would then spiral into even higher prices, hasn’t materialized.

ECB surveys show firms now estimating an average wage increase of 2.8% as of late April 2026. That’s down from 3.1% in the previous quarter. Compensation per employee grew 3.7% year-over-year in Q4 2025, slowing from 4.0% in Q3 2025.

François Villeroy de Galhau, another ECB Governing Council member, affirmed as recently as May 2026 that there has been no significant spillover from energy price increases into overall wages and prices.

The ECB’s inflation target sits at 2%. Projected wage growth of 2.8% is still above that level, but it’s moving in the right direction. The decline from 4.0% to 3.7% in compensation per employee growth represents meaningful deceleration.

For crypto markets specifically, ECB rate decisions have an indirect but real influence, though no specific crypto-related analysis emerged from the ECB’s discussions and how this affects the cryptocurrency space directly remains uncertain.

Investors watching the eurozone should keep their eyes on Q1 2026 compensation data when it arrives. If the deceleration from 4.0% to 3.7% continues into the low 3% range, the case for ECB rate cuts later this year strengthens considerably.

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