Inflation: Christine Lagarde Addresses Business

The inflationary spiral that has struck the eurozone is in relative slowdown, but the ECB’s goal of keeping it around 2% is far from being achieved. We will still have high inflation for the next two years, explained Christine Lagarde in La Provence (where she is present at certain meetings in Aix-en-Provence).

The ECB governor is also making a call to businesses, given that they are taking advantage of inflation to increase their profits, which are rising more than proportionally to increased costs. “It will be important to know if companies can cut their margins a bit to meet the expectations of their employees’ wage increases and restore their purchasing power, as it has usually happened in previous inflationary episodes, or we will see a double increase in margins and wages,” Lagarde explained according to the Askanews reports. “A simultaneous raise in margins and wages would increase the risks of inflation, in the face of which we will not stand still.”