News - 10.03.2026

Wage Rate Increase Takes Effect on 1 April

The Wage and Premises Committee of the collective agreements on the general labour market, composed of representatives from ASÍ and SA, met on Monday, 9 March. At the meeting it was ruled that a wage rate increase will be activated as of 1 April. The wage rate increase entails that the wage rates in collective agreements will rise by 0.06% as of 1 April 2026. This is due to the fact that the wage index on the general labour market increased beyond the negotiated wage rate increases of the benchmark wage rate in the second year of the Stability Agreement.

The committee, which operates according to the collective agreements of the parties for the period 2024–2028, is tasked with monitoring developments in the economy and the possible impact on the agreements’ objectives of reducing inflation and lowering interest rates. The committee is also tasked with assessing the assumptions of the agreement, next in September 2026. At that time, the following assumption will be evaluated: that 12-month inflation in August 2026 will not measure above 4.7%. However, this price-level assumption will be considered fulfilled if inflation over the six-month period from March–August 2026 measures 4.4% or lower at an annualised rate.

The Wage and Premises Committee has also ruled on the productivity increase for the year 2025, but productivity developments during the agreement period do not give cause for its payment.

Inflation Outlook Has Worsened

The main objective of the collective agreements is to contribute to reducing inflation and lowering interest rates. Inflation measured around 8% when preparation of the collective agreements began in autumn 2023. Inflation subsided in the first year of the agreement and had fallen to 4.2% in February 2025, and the process of lowering interest rates had begun. Over the past year, however, there has been a reversal and inflation has increased again. It now measures 5.2%, of which 4.5% is excluding the impact of housing costs. Price increases are measured across a broad base and uncertainty about the economic outlook has increased.

A darker inflation outlook and a serious situation in international affairs increase the risk that the price assumptions of the collective agreements will not hold.