Union leader says all benefit from holding prices down

Inflation in Iceland remained at 5.9%, which is still too high, Vilhjálmur Birgisson, chairman of Starfsgreinasamband Íslands, a labour federation, told mbl.is.

Birgisson said several components of the consumer price index appeared to have risen over the month, including diesel, up 11.2%, and petrol, up 8%. The consumer price index, based on October prices, rose 0.44% from the previous month.

He said he hoped recent collective agreements would begin to show results, noting that inflation figures from months due to drop out of the 12-month calculation over the coming months could work in Iceland’s favour.

Whether prices are brought under control depends on everyone adhering to the shared commitment to hold back price increases and limit increases in fees and tariffs to 2.5%, he said. Birgisson urged all parties that agreed to extend collective agreements for just over a year to meet their responsibility and help tackle inflation.

Icelandic indexed debt totals 4,359 billion krónur, Birgisson said, including 2,293 billion krónur owed by households. He said the latest rise in the price index would increase total indexed debt by 19 billion krónur, with household debt rising by 10 billion krónur in a month.

“We all benefit from holding back prices,” he said, adding that the effort involves the state, municipalities, retailers, service providers and others who influence prices.