Is 'Greedflation' Driving Inflation? New Report Reveals Companies' 'Excess Profits'

A new report from British think tanks, the Institute For Public Policy Research and Common Wealth, argues that 'excess profits' retained by major energy, food, and commodity companies have amplified inflation in 2022. The report analyzed financial reports from over 1,350 large companies worldwide and found nominal profits were, on average, 30% higher at the end of 2022 than in 2019, indicating higher prices have been passed onto consumers. It argues companies in sectors like oil and gas, food production, and commodities had temporary market power after the pandemic that allowed them to raise prices more than needed to maintain margins, exacerbating inflation. The issue of 'greedflation' or companies raising prices excessively, is contested among economists, though some central bankers have cited it as a potential inflationary factor.