Holger Schmieding Wage Quotations

Six quarters of mostly below-trend growth are taking their toll. The trend in rising unemployment and muted wage pressures suggests underlying inflation in the UK could ease further, keeping the door open for a possible rate cut later this year.

Faced with an extremely high euro and high wage costs, the companies stepped up their restructuring. When the euro declined last year, they suddenly found they could take on the world quite easily.

Germany is reaping the fruits of wage restraint and painful structural reforms. In addition, the change in government seems to have improved the business climate even if Merkel has so far done hardly anything in terms of serious economic reforms.