Bjarni expects wage deal to help curb inflation

Bjarni Benediktsson, head of the employers’ association Samtök atvinnulífsins, said he expected a joint effort to curb inflation to produce results into 2027, mbl.is reported. He said inflation that was too high had caused the conditions underpinning wage agreements to fail.

Bjarni said a statement announced on Thursday went further than the existing stability agreement. It was not a given, he said, that the government, municipalities and employers’ organisations would all commit on the same day to a special effort to hold back inflation in Iceland.

He cautioned that the outlook was not entirely positive. The coming weeks and months would be challenging because some companies were under pressure after a prolonged period of high interest rates.

He spoke at a press conference at the Prime Minister’s residence, called by Prime Minister Kristrún Frostadóttir to discuss wage agreements in the private sector.

Samtök atvinnulífsins signed an extension to a wage agreement with VR, LÍV and Fagfélögin earlier on Thursday. The deal was reached shortly before 4 p.m., when the deadline to terminate the agreements over a breach of their conditions expired.