- Decision
- Maintain
- Rate change
- 0 bps
- policy rate
- 1.75%
The Executive Board of the Riksbank left the policy rate unchanged at 1.75% on 17 June, judging that low underlying inflation and somewhat weaker-than-normal economic activity are being offset by rising inflationary pressures from supply disruptions linked to the war in the Middle East and a higher risk that inflation becomes too high. After cutting the rate by 25 basis points to 1.75% in September 2025, the Riksbank has kept it unchanged since. The Riksbank said inflation in Sweden remains low, largely because of fiscal policy measures, while growth was weaker than expected in the first quarter and the labour market recovery is tentative, although household consumption has continued to rise at a solid pace as purchasing power has strengthened. Its updated forecasts put CPIF inflation at 1.1% in 2026 and GDP growth at 2.2% in 2026, both below the March projections. Abroad, the Riksbank said tensions around the Strait of Hormuz have reduced the supply of oil products and pushed up energy and fuel prices, lifting inflation abroad and cost pressures in Swedish businesses, although oil futures indicate near-term supply normalisation and lower oil prices that would limit the rise in import prices and pass-through to consumer prices. The Riksbank raised its policy-rate forecast somewhat and said the probability of a rate increase later in 2026 has risen compared with March, while stressing considerable uncertainty and readiness to adjust monetary policy.
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.