The latest wage deals in the euro zone show employers and unions believe the current spike in inflation will prove temporary, the European Central Bank's chief economist Philip Lane said today.

This would be a welcome development for an ECB seeking to prevent high inflation, which hit a record 7.5% last month, from becoming entrenched above its 2% target.

"The front-loaded nature of recent wage settlements (with 2022 increases larger than 2023 increases) suggests that wage-setters understand that there is a temporary component to the currently high inflation rate," Professor Lane said.

He noted wage agreements concluded since the start of this year pointed to wage growth of around 3% in 2022 and 2.5% in 2023.