Using a new survey of French firms’ inflation expectations that predates the inflation spike, we study how the inflation expectations and own-wage expectations of firms evolved as the inflation environment changed. We show that inflation expectations under-responded to the initial surge but then persistently overshot actual inflation dynamics. As inflation rose, firms initially perceived inflation to be less persistent than in previous years, an effect that dissipated over time. Their wage expectations became increasingly disconnected from their aggregate inflation expectations during the high inflation era, and the pass-through of both price and wage inflation expectations into firms’ actual prices and, to a lesser extent, to employment. This suggests that the scope for wage-price spirals is likely more limited than one might have expected from the surge in inflation and inflation expectations.