The surge in natural gas prices amid supply concerns this week piled on the economic gloom for the euro-zone and we have revised our growth forecasts down further. But price pressures remain intense and will not be helped by the strength of wage increases that are being seen in collective pay agreements this year. Data next week are likely to add to the picture of weak confidence and high inflation, while they are also likely to suggest that the labour market’s remarkable run is drawing to a close.
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