Sveriges Riksbank Deputy Governor Göran Hjelm, discussing the latest policy rate decision, assessed the current rate as slightly expansionary and saw scope to continue supporting the economy without generating excessive demand-driven inflation. However, he said the increased risk of an escalation in the Middle East and resulting price pressures warrants some probability of a rate increase over the year. The Swedish economy has continued to strengthen, with resource utilization approaching normal levels but spare capacity remaining in the labor market. Inflation has exceeded the Riksbank’s forecast, largely because of unusually sharp increases in travel-related service prices that are expected to ease, although Hjelm cautioned that some of the rise may reflect indirect effects from higher energy prices. He also said differences between European Central Bank and Riksbank rates should reflect relative macroeconomic conditions rather than serve as a benchmark for Swedish policy.
2026-08-26Riksbank
Sveriges Riksbank deputy governor sees policy rate as slightly expansionary, flags possibility of increase
Sveriges Riksbank Deputy Governor Göran Hjelm assessed the current policy rate as slightly expansionary and saw scope to continue supporting the Swedish economy. He nevertheless said escalation in the Middle East and associated price pressures warrant some probability of a rate increase over the year.