Dutch central bank president Klaas Knot has called on companies to increase wages, saying their profits are enough to merit a decent pay rise.

A pay rise of between 5% and 7%, coupled with the government’s price ceiling on energy, would be enough to head off the impact of rising prices, Knot told television programme Nieuwsuur on Thursday evening.

‘We have done the calculations and we don’t want wages to decline further. If you want to keep wages at the same level, then you need a pay rise of between 5% and 7%. It is an average at a macro-economic level,’ he said.

Trade, industry and transport are all making high profits, particularly those which have grown on cheap gas and labour, he said. ‘That is now over. We have a structural shortage of labour, and both energy and workers will be in short supply in the coming years.’

And that, he said, means higher wages in sectors that can afford it.

Knot was one of a group of economists to hold talks with ministers on Thursday about measures to offset the impact of high inflation.