FRANKFURT, Feb 10 (Reuters) - The European Central Bank will raise interest rates further, which should lower inflation and thus help wages record some of their lost purchasing power, ECB board member Isabel Schnabel said in a Twitter Q&A on Friday.
"Further rate hikes will help bring inflation back to our target, which – given nominal wages – will increase real wages," Schnabel said. "Rates must reach a sufficiently restrictive level ... (and) we’ll keep rates high until we see robust evidence that underlying inflation returns to our target."
Wages are rising at their quickest pace in decades after soaring inflation wiped out much of the bloc's purchasing power and some policymakers are getting concerned that a further acceleration in wage growth could actually perpetuate inflation via a wage-price spiral.
