Europe

Wages in the eurozone rose at a slower pace during the three months through December as the economy stalled, paving the way for further reductions in the European Central Bank’s key interest rate, the Wall Street Journal reported. The ECB on Tuesday said wages set through negotiations between employers and labor unions or similar bodies were 4.12% higher in the fourth quarter of 2024 than a year earlier, a slowdown from the 5.43% increase recorded in the three months through September.

Hungary left its key interest rate unchanged for a fifth month after accelerating inflation bolstered policymakers’ bias against monetary easing in the months ahead, Bloomberg News reported. The National Bank of Hungary kept the benchmark at 6.5% on Tuesday at the last policy meeting that was chaired by Governor Gyorgy Matolcsy. The decision matched all 23 estimates in a Bloomberg survey. Annual price growth accelerated to a 13-month high of 5.5% in January, underscoring concerns that inflation expectations may stabilize at higher-than-thought levels.

The European Central Bank may have to lower its key rate to a level that stimulates activity if the eurozone economy remains weak and inflation cools, the head of Belgium’s central bank said in an interview, the Wall Street Journal reported. National Bank of Belgium Governor Pierre Wunsch, who is an ECB rate setter, also said a big increase in military spending to reduce Europe’s dependence on the U.S. could revive European factories that have too much capacity and too little demand.

Kremlin officials are dangling the prospect of lucrative investment deals for American energy companies, apparently seeking to convince President Trump that large economic gains could come from siding with Moscow in ending the war in Ukraine and scrapping economic sanctions on Russia, the New York Times reported. There is no doubt that Russia has vast troves of oil and natural gas, but an effort to lure American or other Western energy companies to undertake Russian projects is likely to encounter skepticism, not least because of the companies' recent history in Russia.

Retailers in the U.K. reported a brighter start to the new year, with sales rising after four straight months of falls, though rebounding inflation and low consumer confidence suggest the outlook for the sector remains uncertain, the Wall Street Journal reported. U.K. retail sales volumes were 1.7% higher in January than in the prior month, from a fall of 0.6% in December, the Office for National Statistics said Friday. Food store sales volumes jumped 5.6%, the largest rise since March 2020, following falls in recent months, the ONS said.

A decade ago, Germany was the model nation. Its economy hadn’t just withstood the ascendance of China; it was thriving in its wake. Its balanced public finances stood out in a world of huge government debt. And while British and U.S. lawmakers were caught up in the culture wars, German politicians continued to practice the art of compromise. Today, Germany has gone from paragon to pariah, according to a Wall Street Journal commentary. Its economic model is broken, its self-confidence shattered and its political landscape fractured.

Mastercard's agreement to settle a landmark lawsuit brought on behalf of British consumers was approved by a London tribunal on Friday, despite opposition from the firm that funded the litigation, Reuters reported. The global payments processor said the Competition Appeal Tribunal had approved an agreement it announced in December to settle the long-running litigation over card fees for 200 million pounds ($253 million).