The Riksbank published minutes from its Aug. 19 monetary policy meeting, at which the Executive Board unanimously held the policy rate at 1.75%. The inflation and economic outlook remained broadly unchanged, but the board retained the possibility of a rate increase in 2026 as stronger domestic activity and continuing supply disruptions created predominantly upside risks to inflation. Economic growth in the second quarter was stronger than expected, while household and corporate confidence and manufacturing orders improved, although the labor market remained weaker than forecast. Inflation also exceeded the June forecast, largely because of travel-related services. Adjusting for temporary fiscal measures, CPIF inflation was 2.2% and CPIF inflation excluding energy was 1.6%. The economic effects of the Middle East conflict have so far been less severe than initially feared, but members warned that renewed supply pressures could spread more broadly as demand strengthens. The Riksbank will publish complete forecasts and a Monetary Policy Report in September. Several members indicated that tighter policy may become necessary if inflation broadens or economic activity strengthens more than expected, while Governor Erik Thedéen assessed that the next policy rate change should be an increase, with its timing still uncertain.
2026-08-25Riksbank
Sweden's Riksbank holds policy rate at 1.75%, retains prospect of an increase in 2026
The Riksbank unanimously held its policy rate at 1.75% and retained the possibility of an increase in 2026. Stronger domestic activity and higher-than-forecast inflation have increased upside risks, although Middle East-related supply disruptions have so far had less economic impact than feared. Governor Erik Thedéen said the next rate change should be an increase, but its timing remains uncertain.