Euro zone wage growth slowed in the third quarter from a two-year high hit in the second, data released today showed.

The figures offered little comfort for the European Central Bank in its search for a pick-up in inflation. 

Hourly labour costs rose by 1.6% year-on-year in the three months from July to September, compared with 1.8% in the second quarter, which had been the highest level since the first quarter of 2016. 

Wages were also 1.6% higher year-on-year in the third quarter from a 2.1% increase in the second, which had been the highest rate since the first quarter of 2015. 

Weak consumer price inflation is a particular problem for the ECB as it has undershot its nearly 2% inflation target for over four years despite unprecedented stimulus and will not reach its goal before the end of the decade. 

Euro zone inflation was 1.5% in November. 

The ECB increased its forecasts for euro zone growth and nudged up its expectations for inflation next year to 1.4% from 1.2% and now sees the level at 1.7% in 2020. 

However, despite increased growth and inflation forecasts, the ECB kept interest rates at rock bottom and stuck to its pledge to keep money pouring into the euro zone economy. 

The ECB is keeping a close eye on wages, hoping that robust economic growth and rapid job creation will finally push earnings higher and give inflation a badly needed boost. 

Although employment has increased by nearly seven million since its trough in 2013, wage growth has been limited for years, a puzzling development for policymakers that suggests sizable hidden unemployment. 

It may also signal that globalisation has diminished central banks' control over inflation as supply, demand and labour markets become international.