Wage growth in the euro area appears to be on a more sustainable footing, after the region’s central bank deemed it was no longer being driven primarily by ‘wage drift’.

Wage drift is the difference between the wage actually paid to a worker and the wage negotiated. For instance, while a collective agreement might negotiate a certain pay scale, as labour market conditions tighten, employers might push employees into higher pay bands or offer bonuses to retain staff.

“Annual growth in