FRANKFURT (Reuters) – Wage growth remains strong in the euro zone, but companies could absorb part of the increase by reducing profit margins rather than raising prices, the president of the European Central Bank (ECB) said on Monday ), Christine Lagarde.
“Wage growth is expected to become an increasingly important driver of inflation dynamics in the coming quarters,” she said during a hearing at the European Parliament in Strasbourg.
“At the same time, the contribution of profits… is falling, suggesting, as expected, that increases in labor costs are partially absorbed by profits and are not fully passed on to consumers,” he said. -she continued.
Christine Lagarde also estimated that the current process of slowing inflation should continue, but that the governing council had to ensure that it would lead to a lasting rise in prices of around 2%.
(Written by Balazs Koranyi; Claude Chendjou, edited by Sophie Louet)
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