Corporate profits drove up prices last year, says ECB president

Christine Lagarde says without a shift in corporate behaviour, interest rates will need to stay higher for longer

Corporate profits were the biggest factor driving up prices last year and will be again in 2023 unless businesses are forced to absorb rising wage bills, the head of the European Central Bank has said.

Outlining how the ECB plans to tackle inflation across the 20-member eurozone, Christine Lagarde said she was concerned that firms would again “test” consumers’ appetite for paying higher prices despite a steep decline in most business costs in recent months.