European Central Bank (ECB) President Christine Lagarde stated that authorities will take action if companies see profit margins and salaries increase at the same time.
In an interview with La Provence, the President of the European Central Bank (ECB), Christine Lagarde, said that the authorities will not hesitate to take action if there is a simultaneous increase in company profit margins and salaries. Lagarde also stressed that politicians still need to work to contain inflation.
“Businesses want to know whether they will agree to tighten their profit margins to compensate for employees, or see an increase in both profit margins and wages,” says Lagarde. she said.
This assessment by Lagarde came just before the quarter-point rate hike decision, which was considered definitive at the meeting to be held on July 27. On the other hand, it is known that ECB officials discussed whether to raise the interest rates again at the meeting in September.
The ECB increased interest rates by 25 basis points.
The European Central Bank (ECB) increased the interest rates by 25 basis points to 3.50 on June 15, in line with the expectations. Thus, the bank continued its interest rate increase cycle in the 8th meeting as part of the fight against high inflation. The ECB, which gave the message that interest rate hikes are not over in the text of its decision, raised its inflation forecast for 2023, while lowering its growth forecast.