With:

Spyros Andreopoulos, Senior Economist, Europe

Dani Stoilova, Economist, Europe

BNP Paribas | Global Markets (Recorded 03 April 2023)

• The ECB might find the eurozone’s resilient labour market a tough nut to crack.
• After all, we see three factors behind the tight labour market: strong and resilient aggregate demand, labour shortages due to demographics and mismatch.
• As a result, the ECB may have to suppress demand sufficiently to deal with the cyclical reasons for labour market tightness as well as the structural ones.
• The bottom line is that the labour market is likely to be a key factor sustaining the ECB’s tightening cycle for a while longer.

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