Sweden's union federation warns of increased layoffs after rate hike
The Swedish Trade Union Confederation (LO) has warned that the Riksbank's decision to hike its key interest rate on Tuesday risks increasing the number of people being laid off by companies.
Laura Hartman, the chief economist at LO, said that the union was already seeing the number of people being laid off by their employers increase as Sweden's economy started to enter a slow-down.
"Unfortunately, it's looking pretty grim and it's not been made any better by the interest rate decision," she said. "We are on the way into an economic slowdown, and the Swedish Public Employment Service has also said that we are on the way into a period of higher unemployment."
She said that the unions that are part of her confederation had already started reporting members losing their jobs.
"We are seeing that redundancies are beginning to climb upwards. That's the signal we're getting from our unions. This is to do with the downturn in the business cycle, which is getting worse. We don't have any numbers for it, but our latest forecast for June had growth of 1-2 percent."
"That's changed now, and some people think we are facing a negative growth."
READ ALSO: Sweden’s central bank announces biggest interest rate hike in 30 years
Hartman said that the rise in interest rates would hit members earning less than 30,000 kronor a month hard, at a time when they are already suffering from rising prices.
Pontus Braunerhjelm, economics professor at KTH, said that the bank's rate increase would "put the brakes on economic development and growth", but he said it was important to "get rid of inflation".
Comments
See Also
Laura Hartman, the chief economist at LO, said that the union was already seeing the number of people being laid off by their employers increase as Sweden's economy started to enter a slow-down.
"Unfortunately, it's looking pretty grim and it's not been made any better by the interest rate decision," she said. "We are on the way into an economic slowdown, and the Swedish Public Employment Service has also said that we are on the way into a period of higher unemployment."
She said that the unions that are part of her confederation had already started reporting members losing their jobs.
"We are seeing that redundancies are beginning to climb upwards. That's the signal we're getting from our unions. This is to do with the downturn in the business cycle, which is getting worse. We don't have any numbers for it, but our latest forecast for June had growth of 1-2 percent."
"That's changed now, and some people think we are facing a negative growth."
READ ALSO: Sweden’s central bank announces biggest interest rate hike in 30 years
Hartman said that the rise in interest rates would hit members earning less than 30,000 kronor a month hard, at a time when they are already suffering from rising prices.
Pontus Braunerhjelm, economics professor at KTH, said that the bank's rate increase would "put the brakes on economic development and growth", but he said it was important to "get rid of inflation".
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.