Central Bank governor Lane: Long-term economic hit from hefty wage hikes is no ‘small issue’

The risks of hefty wage increases tipping the economy into a new crisis have risen significantly and will require the Government to keep monitoring the threat each and every quarter, outgoing Central Bank governor Philip Lane has warned.

Speaking to reporters at one of his final public events before taking up a new job as a senior ECB policymaker on the executive board in Frankfurt, Mr Lane said that the growth of jobs in Ireland and elsewhere was “remarkable”, which meant any outsized growth in wages was the most likely source of generating overheating in Ireland’s fast-expanding economy.