All in all, higher wage increases do not necessarily signal a persistent divergence from our 2% inflation target. But we cannot rule out that stronger and sustained wage dynamics will take hold if above-target inflation proves to be persistent. I consider this risk broadly unchanged compared with the December projections.
Risks to the growth outlook The same supply shocks that are rebalancing the risks to inflation are also rebalancing the risks to growth. Since December, economic activity and labour markets have proven more resilient than expected. And the outlook may improve further as lower energy prices support the economy and economic confidence in the current context of robust job growth.