Wage growth could slow future ECB rate cuts after June meeting   

Analysts take for granted an ECB rate cut in June, but also highlight that markets have started pricing in fewer cuts thereafter

Increase in negotiated wage settlements in the first three months of the year will 'raise alarm bells' among ECB policymakers.

A pick-up in wage inflation across the eurozone will not derail prospects for the European Central Bank (ECB) to start cutting interest rates early next month, but may mean future rate cuts through the rest of the year will be delayed, consultancy Capital Economics has warned. 

The increase in so-called negotiated wage settlements in the first three months of the year was "almost entirely" down to German wage deals but will nonetheless "raise alarm bells among ECB policymakers, who want to see wage growth slow before they start cutting interest rates", Jack Allen-Reynolds, deputy chief eurozone economist at the consultancy, said in a commentary.