Sweden’s Riksbank published minutes showing that all Executive Board members supported keeping the policy rate at 1.75 percent at the Sept. 23 meeting while backing a higher rate path. If the outlook holds, increases are expected to begin in 2026 as stronger economic activity, a weaker krona and persistent supply disruptions raise the risk that inflation will exceed the 2 percent target. Members judged that Sweden’s recovery had become broader and firmer, reducing the need for the current expansionary policy stance. At the same time, measured inflation remained low, with Consumer Price Index with a Fixed Interest Rate inflation at 0.7 percent in August. Excluding direct effects from temporary fiscal measures, it was 2.2 percent, while underlying inflation excluding energy and those measures was 1.6 percent. The low starting point and continued labor market slack supported waiting before tightening. Governor Erik Thedéen and Deputy Governor Anna Seim indicated support for an initial increase in November if the outlook remains intact, while First Deputy Governor Aino Bunge favored an increase before year-end and Deputy Governor Göran Hjelm viewed a rise to 2 percent during 2026 as reasonable. The projected policy rate is now just under 0.5 percentage points higher in the second half of 2027 than in the June forecast, although members stressed uncertainty over the extent of further increases.

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