Inflation in the 11-state euro zone is set to decline this spring, as long as forthcoming wage rounds do not lead to excessive wage rises, the European Central Bank (ECB) said yesterday. In its January monthly bulletin, the ECB said that the recent increase in oil prices was likely to exert continued upward pressure on the rate of inflation as measured by the harmonised index of consumer prices in the coming months, but said this should be transitory.

The ECB is concerned the current rise in the cost of living will push unions to call for higher wage increases.