Euro-Area Slack Flags Win for Transitory Inflation Camp

(Bloomberg) -- The pandemic has wreaked havoc on the euro-area labor market and it has yet to heal. Until slack -- which comprises all people with an unmet need for employment -- is fully absorbed, wage gains are likely to remain muted and elevated inflation could disappear almost as quickly as it arrived. That should allow the doves at the European Central Bank to carry the day in December and kick interest rate hikes into the long grass, according to research by Bloomberg Economics.

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