Salary bump to adjust for inflation on Friday
Annual inflation rate is at 6.1%
Luxembourg's salaries and pensions will increase by 2.5% from April, as the country's annual inflation rate stands over 6% on the back of costly fuel, Luxembourg's statistic agency Statec said on Wednesday.
Trade unions and business lobbies agreed the April hike would be the final inflation adjustment this year after employers called Luxembourg's system of automatic wage indexation in question last year, although these proposals still have to be formally endorsed by unions, lobbies and the government.
Higher petrol and energy have been driving a surge in consumer prices in this year, just as the Russia's war against Ukraine kicked off. Europe depends heavily on Russian gas and the armed conflict is likely to boost prices even further.
Earlier this month, Eurostat said that consumer prices across the EU jumped 5.8% from a year ago in February, up from 5.1% the previous month.
Instead of a next wage indexation, which would normally be expected in August, less well-off residents would receive tax breaks, Prime Minister Xavier Bettel has said, pledging to lower taxes on fuel and to freeze rents.
In a separate note on Tuesday, Luxembourg's Chamber of Employees, a public body representing workers and retirees, said that companies have record profit margins in 2021, equivalent to two indexations, at the detriment of workers.