Nevertheless, the rate of wage increase does seem to be rising a little in Germany. Higher German wage growth may facilitate the adjustment process in the debt-ridden economies without jeopardising the ECB’s inflation target. Appreciation of the euro helps to keep import prices at bay. In April, prices rose by only 0.7 per cent in the euro area.
But overall inflation expectations are well-anchored at around 2 per cent, and the ECB does not see any risk of deflation in the euro area. *** In Denmark, economic activity is also picking up, although the growth pattern has been somewhat uneven.