Wednesday’s increase is 0.5 percentage points. The next increase is expected to be 0.25 percentage points and will come in June or September, according to the Riksbank’s forecast.
The announcement about the future increase is a way to make the Swedes believe that tough times are ahead and thus reduce consumption, says SVT’s economic commentator Alexander Norén.
– It is there to scare us, he says.
Disagree on the decision
He also emphasizes that the members of the Riksbank’s board of directors were in disagreement – several members wanted a more modest increase of 0.25 percentage points.
– There are good arguments for having a tough interest rate policy and there are good arguments for starting to calm down. They are now sitting and debating about that, says Norén.
The Riksbank’s goal is for inflation to be around 2 percent. In the last year it has been several times higher and the value of our money has decreased rapidly.
The Swedes can expect more interest rate increases in 2023, have The Economic Institute predicted. Only next year can the policy rate go back again according to the authority’s forecast.
With Wednesday’s increase, the policy rate is the highest since October 2008.
The article is updated