Euro zone companies are reporting or anticipating greater pressure from workers for higher wages after the Iran war drove up living costs, a European Central Bank survey showed. The share of large companies identifying that risk rose to 40% from 20% in the July survey. Wage growth is still projected to slow, from 3.2% last year to 3.0% this year and 2.9% next year, but the moderation is expected to be more gradual. The ECB kept interest rates unchanged on Thursday while hinting at a hike at its next meeting, and is monitoring whether energy-driven inflation is spreading into pay. Companies continue to face limited ability to pass higher costs through to consumers, with about 90% of consumer-facing respondents reporting only partial or limited pass-through, compared with less than half of business-facing companies. Selling-price growth is expected to moderate, although cost pressures could persist into next year as hedges expire, agricultural prices rise and earlier increases continue to feed through. Investment is increasingly focused on AI, cloud computing, data centres, defence and electrification, while strong public-sector and healthcare demand supports software, engineering and renewable-energy firms. Other industrial sectors remain subdued, although trade protections have benefited steelmakers.