Talking to LO members in Västerås, 100km west of Stockholm, the Riksbank’s Kristina Persson hit back at unions’ criticism of interest rate policy.
The Riksbank has raised interest rates twice this year, from 1.5 to 2 percent.
Both rises have been slammed by LO chairman Wanja Lundby-Wedin and leading Social Democrats including party secretary Marita Ulvskog. Göran Persson himself has questioned the rate rises.
Hitting back at critics, Kristina Persson said lower unemployment could not be bought with higher inflation.
“I argue that the reverse is true: stable prices give the economy a good base to stand on,” she said.