European Central Bank President Christine Lagarde on Thursday called for a social debate on “adequate sharing” of the “burden” of inflation, as the margins of many companies have increased in recent months in the euro zone.
We hope for an adequate sharing of the burden, indicated Christine Lagarde during a press conference Thursday, at the end of her monetary policy meeting. The leader called for a debate within the company, companies on the subject.
The price hike has worked a bit like a household tax, she lamented.
According to several analyses, companies have recently reconstituted their margins by raising their prices beyond the increase in their costs linked to inflation, which has also fueled the rise in prices.
The realization that the contribution of unit margins to inflation is significant calls into question the narrative that the ECB has favored until now, and which was focused on the risk of a wage-price spiral, according to Eric Dor, director of economic studies at the IESEG business school.
With these profits, companies have decided to gratify their shareholders, without increasing wages or reducing their prices to consumers.
Worldwide, companies are paying their shareholders $1.560 billion in dividends in 2022, a new record set in part thanks to oil and gas companies, ahead of a promising 2023, according to a report by asset manager Janus Henderson.
This total amount of dividends paid is up 8.4% compared to 2021, the previous record year thanks to the rebound in global economic activity after the health crisis, according to this document.