The biggest Dutch trade union federation, the FNV, will call for a 3.5% pay rise in the coming round of pay negotiations, but will demand up to 5% for people on low incomes.

The FNV traditionally publishes its negotiating position ahead of the publication of the national budget. The outgoing government will publish a holding spending plan on Tuesday, given that talks on forming a new coalition have not yet been completed.

The FNV says the pay rise is needed because the economy is back on track and because wages have not risen as much as they could have done in the past few years.

‘The economy is performing well and most companies are earning significant amounts, but workers are not seeing the benefits,’ said FNV negotiator Zakaria Boufangacha. ‘We want to catch up, so that workers can profit fairly as well.’

The central bank and government macro-economic think-tank CPB have both forecast economic growth to hit 2.5% next year. The central bank has also said there is financial room for pay rises next year.

The CNV trade union federation, the second biggest in the Netherlands, said at the weekend it will also be targeting a ‘substantial increase’ but the amount will vary per sector.