- Decision
- Maintain
- Rate change
- 0 bps
- policy rate
- 1.75%
Sveriges Riksbank’s Executive Board left the policy rate at 1.75 percent at its 18 December 2025 meeting, arguing that stronger‐than-expected growth and inflation edging toward the 2 percent target warrant keeping current monetary support in place and that the rate is likely to stay unchanged “for some time to come”. After cumulative cuts of 75 bp since January—including a 25 bp reduction in September—the rate has been on hold at 1.75 percent for two straight decisions. The unchanged setting, to take effect on 7 January 2026, is intended to underpin domestic demand and ensure inflation stabilises near target. CPI inflation has broadly tracked earlier projections and “approached” 2 percent, with the Riksbank’s forecasts putting CPIF at 2.7 percent in 2025 before easing to 0.9 percent in 2026, while GDP is now seen expanding by 1.5 percent in 2025 and 2.9 percent in 2026 amid tentative labour-market improvement as unemployment slips from 8.8 percent to 8.6 percent. The bank highlighted external hazards—including geopolitical conflicts, uncertain US trade policy, elevated asset valuations and fragile public finances abroad—as well as domestic uncertainties around household consumption and forthcoming fiscal expansion, and stressed it stands ready to adjust policy should the inflation or growth outlook deteriorate.
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.