•  High-income countries generally face challenges in terms of rising inequality due to technological progress, which has increased the wage dispersion in favour of higher-skilled workers. To address these matters, concerted efforts should be introduced to promote increased investments in human capital. Flexibility in the labour markets can contribute towards an enhance absorption of labour combined with appropriate social support systems.
It is crucial at this stage to avoid that the recent rise in inflation translates into broad-based second-round effects, for instance via price-setting or higher wages. Such effects would give rise to broad-based inflationary pressures over the medium term. In the view of the Governing Council, as expressed on 3 March, risks to the price outlook are on the upside.