Corporate profits drove up prices last year, says ECB president

The president of the European Central Bank, Christine Lagarde (centre), says corporate profits accounted for about two-thirds of inflation in 2022. Photograph: Horacio Villalobos/Corbis/Getty

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.