(Bloomberg) -- The European Central Bank must have certainty on wages in order to be able to lower interest rates, according to Governing Council member Klaas Knot.

There’s a “credible outlook” to bring inflation back to the ECB’s 2% goal in 2025, he said on in an interview on Dutch state broadcaster NPO1 on Sunday.

“The only piece of the puzzle we are missing is the absolute conviction that wage growth will adapt to slower inflation,” Knot, who’s among the more hawkish rate setters, told the Buitenhof TV program. “When that piece of the puzzle falls into place, we will be able to lower the interest rate a bit.”

His comments are in line with those of some of his colleagues — including Chief Economist Philip Lane — who have suggested that the ECB needs clarity on salary increases in order to be able to lower borrowing costs. As those data won’t be available until the end of April, that would make June the most likely time for a first step.

Markets expecte the ECB to move more quickly. Encouraged by President Christine Lagarde pushing back less forcefully than expected against bets for a cut as early as the spring, investors stepped up their April wagers after Thursday’s rate decision. 

The faster timeline also got additional ammunition this weekend, with French central bank chief Francois Villeroy de Galhau saying in an interview with La Tribune Dimanche that all options are open at upcoming meetings.

“We can only have sustainable price stability if wages growth goes back to a pace of about 2.5% — the latest wage growth in Europe is at 5%,” Knot said on Sunday. “That trajectory won’t occur from one day to the other,” he said.

There will be “a couple of years in which we think that the wage growth will be higher than inflation, allowing a restoration of purchasing power,” the Dutch central banker said.

Yet that won’t stand in the way of inflation going back to 2%, as “there’s still space in the profit margins to pay these higher salaries without a drastic second round for price hikes,” he said. “But it is a narrow path.” 

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