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German pay deal will add to the ECB’s inflation concerns

The news that Germany’s largest trade union, IG Metall, has won a 5.2% pay rise over the next 14 months has added to concerns over a build-up in medium-term inflationary pressures. While we think that such fears are overdone, signs of rising wages growth in the euro-zone’s largest economy will certainly have done nothing to ease the ECB’s inflation worries.

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