ECB Lane says we are not seeing any big wage response to the energy shock

The mechanism at issue is the second-round channel: energy shocks transmit to headline inflation mechanically, but the wage-setting response determines whether they become embedded in core, and it is that distinction which has historically separated transitory energy spikes from sustained tightening cycles. A signal that negotiated wages are not reacting is the precondition for looking through the shock, a posture central banks in this position have adopted when inflation expectations remain anchored and labour markets lack the bargaining tightness to force catch-up settlements. The case distinction worth drawing is between spot-driven energy moves, which wages typically ignore, and a sustained terms-of-trade deterioration, which in past episodes has eventually surfaced in settlements with a lag. Follow-ons are the negotiated wage tracker, compensation-per-employee prints, and whether other Governing Council members adopt the same framing, since convergence among hawks and doves has tended to precede shifts in the reaction function. As commentary it is directional rather than a commitment, but it points toward tolerance of a higher headline print provided core and wages stay contained.