Union leader urges government to curb tariffs as inflation rises

Vilhjálmur Birgisson, head of the Starfsgreinasambandið workers’ federation, says the government must join efforts to bring down inflation by limiting increases in its charges. He spoke to mbl.is after Iceland’s 12-month inflation rate rose to 5.9%.

The rate increased by 0.3 percentage points from 5.6% the previous month. Birgisson said the sharp rise had been expected after a temporary measure involving value-added tax on fuel was withdrawn.

He called on the government to commit to limiting all its tariff increases to 2.5%, saying it would lack credibility in the fight against inflation if one charge were allowed to rise by about 16%. He was referring to a planned increase in the mileage charge on vehicles.

Birgisson said local authorities had agreed to take part in efforts to contain price rises, and that companies were also joining. Hagar has announced a 2% price cut on nearly 1,000 products at Bónus and Hagkaup until the end of the year. Krónan and Prís had previously announced their own measures.

He said the government’s participation was essential and argued that the measure in question would affect just 0.28% of total state spending, which he put at 1,705 billion krónur. “I refuse to believe the government will be the reason everything goes to hell,” he said.