ECB council member Madis Muller warns over the impact of wage increases on inflation.

Mr Muller stated that quickening wage increases pose a key threat to the euro-area inflation outlook.

“If wage rises — which have accelerated in the euro area — remain so fast, then maybe the decline in core inflation will be slower than currently forecast,” Mr Muller said. That “could also mean that getting inflation firmly anchored to 2% over the medium term could also become more complicated,” Muller said. “That’s something we need to follow.”

While policymakers including Mr Muller are reluctant to discuss what may happen after another expected rate increase in July, others warn that hikes may still be needed come the following meeting, in September.