The British newspaper earlier reported that large corporations like supermarkets, food manufacturers and shipping companies were accused of exploiting the Wuhan coronavirus (COVID-19) pandemic and the Russia-Ukraine war to drive their profits higher and prioritize dividends to shareholders over fair pricing for consumers.
Unions, academics and city economists believe that the corporate data from 2019 onwards reveals systematic and excessive price increases, coining the term "greedflation." A separate analysis by Unite, the U.K.'s largest private-sector trade union, supported the claims of these critics. The research conducted earlier this year on the top 350 companies listed on the London Stock Exchange reveals that their average profit margins surged from 5.7 percent in the first half of 2019 to 10.7 percent in the first half of 2022. This percentage represents an alarming 89 percent increase in the average profit margin of FTSE 350 firms over the same period. For instance, Procter & Gamble – a U.S.-listed firm known for personal care brands like Gillette, Braun and Tampax – has maintained a profit margin exceeding 17 percent over the past three years. CEO Jon Moeller received a 44 percent pay increase to $18 million last year. Another study from 2022 also revealed the same instances, wherein fertilizer company Nutrien's profits surged by about $1.2 billion over two years, with higher selling prices offsetting increased raw materials. Albert Edwards, a senior analyst at Societe Generale, suggested that the rise in inflation to double digits in the U.K., U.S. and Germany has worsened due to "price gouging." He argued that companies, under the cover of crises, have pushed profit margins higher, even as raw material costs decrease."And, most surprisingly, they still continue to do so, even as their raw material costs fall away. Consumers are still 'tolerating' this 'excuseflation,' possibly because excess [government] largesse has provided households with a buffer," said Edwards.
Paul Donovan, the chief economist at UBS Wealth Management, called for a revival of the "rip-off Britain" campaign from the 2008 financial crisis era. "Much of the current inflation is driven by profit expansion," he said. "Typically, one would expect about 15 percent of inflation to come from margin expansion, but the number today is probably about 50 percent." EconomicRiot.com contains updates and news related to the ever-soaring prices and the collapsing U.S. economy. Watch the video below that tackles how inflation continues to crush American families. This video is from the NewsClips channel on Brighteon.com.Americans need to make $11,400 more today to maintain the same standard of living they had in 2021.
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