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Euro zone firms struggle to raise prices despite Iran war shock
Reuters analysis of 175 earnings calls found just 56 companies planned price increases, suggesting weak demand is limiting war-related inflation pressure.
- A Reuters analysis of 175 euro zone earnings calls shows only 56 companies have raised or plan to raise prices in coming months, indicating subdued demand amid the Iran war is curbing corporate pricing power.
- This contrasts sharply with 2022, when 108 of 132 non-financial companies passed on higher costs following Russia's invasion of Ukraine, driven by pent-up demand and substantial fiscal support that boosted the economy.
- Industrial firms report greater success passing on costs than consumer-facing retailers; Delhaize committed to keeping prices low while Volkswagen is focusing on cost-cutting instead of price increases.
- European Central Bank policymaker Olli Rehn noted the labour market is less tight than in 2022, while Allianz Global Investors' chief economist Christian Schulz said the ECB can "likely afford a bit more patience."
- Spyros Andreopoulos, founder of the Thin Ice Macroeconomics consultancy, warned "the jury is still out" on inflation persistence, even as firms increasingly use hedging to manage energy cost volatility.
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5 Articles
Euro zone firms struggle to raise prices despite Iran war shock
Only a third of the euro zone's largest companies have indicated they are raising prices in response to the Iran war, a Reuters analysis of listed corporate earnings commentary shows, suggesting a weak economy is curbing their pricing power.
·New York, United States
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Total News Sources5
Leaning Left0Leaning Right2Center1Last UpdatedBias Distribution67% Right
Bias Distribution
- 67% of the sources lean Right
67% Right
C 33%
R 67%
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