Profit margins may drive inflation

The expected profit margin of large, listed companies (MSCI EMU) in the eurozone is relatively stable. This means that many companies can pass on rising costs 1:1. The picture is diverse for the five largest sectors. The financial sector is able to significantly expand its margin in the current environment of rising interest rates. Companies in the "cyclical consumer goods" sector have less pricing power due to the current economic downturn. There are reports that the ECB sees stable profit margins as a driver of inflation.