In remarks at the Ruter Dam event in Stockholm, Sveriges Riksbank Governor Erik Thedéen said stronger-than-expected economic growth and increased upside inflation risks provide strong reasons to raise the policy rate in the near term. He reiterated that, at the September monetary policy meeting, he considered an increase as early as November reasonable and supported a higher rate forecast that indicated further increases in 2027, while emphasizing the uncertainty surrounding that path. Thedéen pointed to broad-based second-quarter growth in investment, exports and household consumption. He warned that high energy and commodity prices, persistent supply disruptions and a weaker krona could combine with strong demand to broaden companies’ price increases and keep inflation well above the 2% target. September inflation data and other incoming information will inform the assessment of inflation, economic activity and monetary policy at the November meeting. He also said the sharp rise in international long-term interest rates could weaken growth through higher borrowing costs, lower asset prices and pressure on public finances in highly indebted countries. Sweden’s low government debt reduces its vulnerability, but Thedéen stressed the need to preserve the fiscal policy framework in future budgets.
Sveriges Riksbank Governor Erik Thedéen sees strong case for near-term rate increase as inflation risks rise
Sveriges Riksbank Governor Erik Thedéen said stronger growth and rising inflation risks support a policy rate increase in the near term, potentially as early as November. High input costs, supply disruptions, a weaker krona and robust demand could broaden price increases and keep inflation above the 2% target. September inflation data will form part of the assessment at the November policy meeting.