- Decision
- Lower
- Rate change
- 25 bps
- policy rate
- 2%
Sveriges Riksbank’s Executive Board cut the policy rate by 25 bp to 2.00 percent, citing a slower-than-expected domestic recovery, persistent high unemployment and an outlook for inflation that is now seen running below the March projection. After lowering the rate from 4 percent in May 2024 to 2.25 percent in January 2025 and holding it at that level in March and May, today’s move resumes the easing cycle. Inflation has eased since its early-year upturn and, with weaker demand, is projected at 2.4 percent on the CPIF measure in 2025, while GDP growth is forecast at 1.2 percent and unemployment at 8.5 percent. Externally, ongoing geopolitical tensions and trade-policy uncertainty—especially the escalating conflict in the Middle East—are expected to weigh on global and Swedish growth. The rate path published by the central bank assigns a non-negligible probability to another cut later in 2025, with future policy dependent on incoming data and its implications for the inflation and activity outlook.
Rate evolution
From June 2025 to September 2026, the Riksbank lowered the policy rate from 2 per cent to 1.75 per cent, cutting in June and September 2025 and then holding it unchanged. The June cut reflected a recovery that had lost momentum, a softer inflation outlook, weak growth and high unemployment, while an August pause treated above-target inflation as temporary despite weak activity, and the September cut followed signs of easing inflation pressures even as the recovery and labour-market improvement remained delayed.
During subsequent holds through June 2026, the Riksbank said inflation had moved close to target and then below forecast while activity improved only tentatively, but uncertainty widened from trade policy and domestic demand to the war in the Middle East, energy and commodity prices, the krona and fiscal policy. On 17 June, it judged that underlying inflation was low and activity somewhat weaker than normal, but raised its policy-rate forecast somewhat and flagged a greater probability of an increase later in 2026 as war-related supply disruptions lifted inflationary pressures.
On 20 August, the Riksbank held the policy rate at 1.75 per cent, noting that growth and inflation had exceeded its June forecast but that subdued company pricing plans, fewer global supply-chain disruptions and weaker-than-expected labour-market developments left the overall outlook largely unchanged. On 24 September, it again held the rate at 1.75 per cent, but said stronger, broad-based activity and continued supply shocks meant the policy rate should rise more than projected in June, with increases expected to begin in 2026 if the outlook remained unchanged, as inflation pressures remained above normal despite measures of underlying inflation being relatively close to 2 per cent.