ECB Wakes Up to Greedflation as Key Culprit in Price Struggle

The European Central Bank is catching up to an inflation risk that’s proving far more powerful than the wage-price spiral that policymakers have been worrying about.

Officials speaking this month increasingly highlight the importance of surging profits in the euro zone’s most severe spell of inflation, with President Christine Lagarde warning in late March of a “tit-for-tat” dynamic where widening corporate margins propel salaries and prices ever higher.