The Riksbank raises the key interest rate again, now it is at the highest level since 2008. Riksbank Governor Erik Thedéen gives tips to consumers and responds to the harsh criticism. – You have a personal responsibility, he says. On Wednesday, it was announced that the key interest rate will be raised a further 0.5 percentage points to 3.5 percent. Mortgage interest rates are expected to follow suit. After the increase, the Riksbank has received strong criticism. One who is critical is LO’s chief economist Laura Hartman. – I am concerned, I mean that we should rather have seen the interest rate unchanged and a plan for future reductions. Households are under a lot of pressure, you choose which breakfast bread you can afford to buy – if anything, she says. The Swedish Confederation of Business is also critical of the increase and believes that an increase in the key interest rate could worsen the recession. Erik Théeden understands the criticism but believes that it is a given to tighten monetary policy when inflation rises. – If you look around the world, it is not the case that the Riksbank is the only central bank that makes this assessment. But these are difficult decisions, of course it affects individuals and the Swedish economy, says the governor of the Riksbank. Tips for households Some households are hit harder than others by higher interest rates. According to Erik Théeden, households have a personal responsibility. – Households have a tough time, but there are quite a few households that end up in a bankruptcy-like scenario. You have to tighten up and that can be tough in itself, he says. When the policy rate is raised, the banks raise mortgage rates. The Governor of the Riksbank believes that, despite the tough economic situation, it is a good time for households to invest any surplus in the transaction account. – If you have a small surplus in your transaction account, there is a lot of scope for the individual consumer to deposit it in a better savings account at their own or another bank. It’s a chance for those who have little savings to get a return, says Erik Théeden.
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