Visco warns of danger of revising wages down if inflation undershoots predictions

Ignazio Visco
Ignazio Visco

Recent Italian pay settlements may increase the danger of a downward spiral in wages, the Bank of Italy governor warned on April 7.

Some pay settlement contracts in Italy have "agreed that parts of future pay rises will be revised downwards" if inflation falls short of current forecasts, Ignazio Visco told an audience in Frankfurt.

This could have serious effects on the European Central Bank's (ECB) attempts to restore eurozone inflation to just under 2%, he argued.

According to Bank of Italy's

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