Sweden is heading into a recession with rising interest rates and high inflation, which affects both private individuals and companies.

At the same time, large parts of the business world are doing well.

Several major banks have recently reported increased profits, for example Volvo Cars recently announced that they doubled their profit and the country's ICA stores are breaking profit records.

The upcoming negotiations will take place in a tough environment, both sides agree on that.

Many want wage compensation for the rising prices, even though analysts have warned that it could contribute to increased inflation.

- I am convinced that we will have a complicated negotiation process.

We have had complicated negotiations before, but this one will be a little extra difficult, says Jan-Olof Jacke, CEO of Swedish Business, in Aktuellt.

"Then everyone becomes a loser"

LO's affiliates agreed on Tuesday to primarily pursue a low-wage initiative in the collective bargaining process.

- We see that many of the LO unions' members are having a tough time.

They are on the margins and many times below.

They have nothing to take off.

Therefore, we see that it is more important that those who have it worst receive a proper salary increase, says the chairman Susanna Gideonsson, also a guest in Aktuellt.

She believes that it is possible to invest in those who earn the least, without fueling inflation.

But the question is whether the high earners will accept it.

- It remains to be seen ... but we know that if we push everything too high in terms of wages, so that we increase inflation, then everyone will be the loser.

Difficult future for companies

According to Jan-Olof Jacke, the situation is made more difficult by the fact that the recession, which is now hitting households hard, will soon also affect companies.

He points to challenges for new housing production, the consumer goods trade and energy-heavy investments.

- We'll see what happens when the real demands come.

Then we should probably sit down and responsibly handle this issue both with LO and with the civil servants.

He emphasizes that a great deal of responsibility must be taken on the entire labor market, but admits that it may be difficult to sell in reduced real wages for wage earners when many companies are currently doing well.

- It is not a big problem that our companies are doing well.

This is what creates the conditions for new jobs.

As long as the companies are doing well, the difficulties are much less.

Hear Susanna Gideonsson and Jan-Olof Jacke discuss three announcements from the new government in the video clip above.