Continued tightening monetary policy
The members of the Riksbank have made it clear that the current monetary policy needs to remain tight in order to ensure economic stability and control inflation. Accordingly, they decided to keep the policy rate at 4 percent.
Possibility of future interest rate increases
An important aspect of the Riksbank’s strategy is the readiness to raise the policy rate further if necessary. This was made clear in the minutes of the last meeting.
“The Executive Board is prepared to raise the key interest rate further if the inflation outlook deteriorates,” states the Riksbank when the minutes from the meeting are presented.
The savings account you should NOT have the money in – after the new interest rate increase
Inflationary pressure is easing
Deputy Governor of the Riksbank Anna Bremen points out at the meeting that there are signs that inflationary pressure is gradually easing. This includes a decline in more price categories than just energy prices.
She also interprets the subdued economy and the slowdown in the labor market as indications that inflation is on the way down.
“We see a clearly subdued demand in Sweden and in the rest of the world, and that the labor market is slowing down,” she said.
Deputy Governor of the Riksbank Martin Flodén highlights several factors that are decisive for future decisions on interest rate increases. These include wage developments, the development of the krona and the companies’ price adjustments. Despite this, he notes that the inflation outlook “has brightened somewhat”.
More interest rate announcements in 2024
Eight monetary policy meetings, and thus interest rate announcements, are expected in 2024, compared to five in 2023, which gives the Riksbank more opportunities to make new assessments of monetary policy. An aspect that is also being considered is the possibility of expanding the sales of government bonds at future meetings, writes Finwire.
Inflation in Sweden
Statistics Sweden’s (SCB) latest figures show that the inflation rate in Sweden was 6.5 percent in October 2023 compared to the same period last year. This represents an unchanged level from September to October. Furthermore, the CPIF (Consumer Price Index with fixed interest rate) indicates an inflation rate of 4.2 percent during the same period.
Read more: Here are the households that lose the most from the new interest rate increase: “Harmed a lot”
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