European Central Bank (ECB) President Christine Lagarde guarantees that the banking regulator “will not sit idly by” if there is an increase in wages and corporate profit margins that could undermine the goal of keeping inflation below the 2nd level. %.
This was reported by Lagarde in the French newspaper La Provence. If companies cut profit margins to pay higher wages to workers, margins and wages could double, “raising the risk of rising inflation,” he explained. Several Portuguese politicians, including the President of the Republic, have already criticized the idea for how it destroys people’s lives. In this scenario, the ECB will intervene to ensure that annual inflation stabilizes below 2%. This is why interest rates have risen, leading to higher home loan installments.
This Friday, ECB Vice President Luis de Guindos confirmed that inflation in the euro zone should remain above 2% for some time, which forces the banking regulator to act.
Author: Vitor Moita Cordeiro
Source: CM Jornal
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