Reuters is out with a report suggesting the ECB's staff are losing faith in leadership because they failed to control inflation and pay hikes aren't keeping up.
The report cites a survey by trade union IPSO, which holds 6 out of 9 seats on the ECB's staff committtee. It showed that two-thirds of the 1600 respondents said trust in Lagarde and the Executive Board had been damaged by recent developments on failing to control inflation and a pay increase that didn't match the rise in inflation. 40% of staff said they had 'low' or 'no' trust in leadership.
I don't see this as a market-moving headline but some of the discontent highlights the tough environment for Lagarde. Many Germans are inflation hawks and the failure to control prices is an embarassment for the institution. In an effort to regain trust, the ECB could over-hike.
