While labour markets were not the key source of the recent spike in inflation, they could become important for the persistence of inflation. By late 2022, most EME central banks reported strong labour markets but a low risk of adverse wage-price spirals. Wage indexation has fallen sharply over the last decades and so has the pass￾through of wage increases back to consumer prices. Labour costs in EMEs now account for only 20−35% of total production costs in EMEs on average, and increased exposure to international market contestability may have put a lid on the power to raise prices. That said, indexation remains important for minimum wages and informal indexation to past inflation implies that central banks should remain vigilant so as to avoid a transition from a low- to a high-inflation regime. Keywords: emerging markets, globalisation, indexation, informality, inflation, labour cost, labour market, minimum wage, Phillips curve, unemployment, wage-price spiral, wages.