In February, sentiment in the services sector improved sharply, back to levels seen before the discovery of the Omicron variant. A faster and more frontloaded recovery, in turn, risks increasing pressure on wages at a time 2/8  BIS central bankers' speeches  when the labour market in the euro area is already showing first signs of strain.
This brings me to the second point – the recovery in the labour market. Strong recovery in the labour market Although the pandemic is still raging through the economy, slack in the labour market has continued to decline at a notably faster pace than projected (Slide 5, left-hand chart).