Some 90 per cent of 288 respondents in a Markets Live Pulse survey said companies on both sides of the Atlantic have been raising prices in excess of their own costs since the pandemic began in 2020. Almost four out of five said that tight monetary policy is the right way to tackle profit-led inflation.
The consumer sector has seen the most opportunistic pricing during the pandemic, some 67 per cent of respondents said. The energy industry came a distant second, with about one-sixth of votes. Those findings may reflect the fact that people buy basic consumption goods more often than bigger-ticket items, so they’re likelier to notice when the prices jump – an idea known as “collision frequency.’’
But reality has rudely refused to conform. Margins were already elevated before the pandemic, and they’re now even more so. Margins are beginning to fall from their highs as firms rebalance the price-versus-volume trade-off, but they remain significantly higher than in the pre-COVID years.
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