The skyline in Sweden

Sweden Monetary Policy September 2022

Sweden: The Riksbank delivers larger-than-expected hike in September

At its meeting on 19 September, the Riksbank delivered its largest increase in nearly 30 years: a 100 basis point raise, bringing the policy rate to 1.75%. While markets expected a hike, its size took them by surprise, as only a 75 basis point rise had been priced in. The Bank also noted that, while asset purchasing activity in H2 will be as announced in June, it will likely stop these purchases at the end of 2022.

The move was primarily driven by the Banks desire to rein in inflation, which has continued to accelerate rapidly and has surpassed the Banks previous forecasts. Growth in consumer prices with a fixed interest rate soared to 9.0% in August (July: 8.0%), the highest level in over three decades. Additionally, the Riksbank sees inflation rising further in the remaining months of the year, and it has stated that the risks of high inflation becoming entrenched are still significant. Lastly, the strong performance of the Swedish economy gave the Riksbank room to raise the rate comfortably.

With regard to forward guidance, the Riksbanks tone was hawkish in its communiqué. The Bank noted that “the policy rate will be raised further in the coming six months”. Consequently, its policy rate forecast was raised again: The policy rate is now seen ending 2022 at 2.50%—instead of Junes 2.00% forecast for early 2023.

The next monetary policy meeting is scheduled for 23 November.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest