The Swedish Trade Union Confederation (LO), with 14 affiliates and in total almost 1.5 million members, failed to reach a common approach ahead of the coming pay talks. The various trade unions will thus negotiate separately. The critical point was gender inequality.
Today's message increases the probability for higher wage growth for the total economy. Wage agreements for the manufacturing industry will probably be set at modest levels, in line with or even below the past wage round. However, it is now less certain that other trade unions will follow the benchmark set by the manufacturing industry.
"Higher wage increases will lead to higher inflation too. However, it would take markedly higher wage agreements to maintain inflation at 2%, which is unlikely. Thus, the Riksbank will still be struggling to reach to 2% target", argues Nordea Bank.
