The head of the European Central Bank (ECB), Christine Lagarde, threatens to intervene if companies’ wages and profit margins rise. Lagarde said this in an interview with the French newspaper La Provence. “We want to know if companies will accept lower profits to compensate workers or if we will see a double increase in both profit margins and wages.”
If so, there is a risk that the already high inflation cannot be suppressed. Lagarde wants to avoid it at all costs. “We will not stand idly by in the face of such risks,” he warns.
interest rate increase
The ECB chief’s remarks precede the interest rate decision on July 27. Lagarde has already said that interest rates in the Eurozone will almost certainly be raised by another quarter of a percentage point. Lagarde has previously said that ECB policy makers have “work to do”.
After the July meeting, the ECB will take a summer break. Whether interest rates will be raised further in September depends on the data available at that time.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
