Key Takeaways
- The Riksbank kept its policy rate unchanged at 1.75% at its final meeting of 2025.
- Inflation has fallen to its 2% target.
- Markets expect rates to stay on hold, with a rate hike the most likely next move.
Sweden’s Riksbank held rates at 1.75% for the second meeting in a row, ending the year with a total of three rate cuts.
“The prospects for the Swedish economy are looking brighter. Although it will take time before economic activity returns to normal, the recovery is underway,” the Riksbank said.
The Riksbank Sees Signs of a Stronger Recovery
Although inflation has varied from month to month, it has largely moved in line with the Riksbank’s September forecast, and now stands at the target 2%. The Consumer Price Index with a fixed interest rate, or CPIF—the Riksbank’s preferred inflation measure as it strips out the direct effects of changes in mortgage interest rates—fell to 2.3% in November.
While the Riksbank’s inflation outlook is forecast to remain unchanged, the board points out that the economic outlook appears slightly better.
“Compared with the forecast in September, growth has been higher and economic activity is assessed to be stronger. The situation in the labor market remains weak, but there are increasingly clear signs that it is beginning to improve,” the Riksbank said, while highlighting uncertainty in the inflation and economic outlook due to factors such as geopolitical conflicts, weak public finances in several countries, and high valuations in financial markets.
“The Riksbank remains confident that the current high inflation will drop next year, a view that we share,” says Torbjörn Isaksson, economist at Nordea.
Will the Riksbank Raise Interest Rates in 2026?
The Riksbank’s rate path forecast remains flat at 1.75% for 2026, signaling that policymakers consider the easing cycle complete.
“If the outlook for inflation and economic activity holds, the policy rate is expected to remain at this level for some time to come,” the Riksbank said.
However, the rate path was slightly raised for 2027 and 2028, “probably reflecting the improved growth outlook,” according to Nordea’s Isaksson.
“Inflation is in line with forecasts and the recovery in the Swedish economy has gained momentum, and we expect the Riksbank to stay on hold at 1.75% next year,” says Isaksson.
There is, however, a possibility that the Riksbank could become more dovish during the first half 2026, due to downside risks to the inflation forecast. At the same time, Isaksson notes that GDP growth “could very well surprise on the upside, implying more rapid rate hikes further out—which the small upward revision of the Riksbank’s rate path indicates.”
Handelsbanken also highlights that recent data point to an early-stage recovery and forecasts a first rate hike in Q1 2027, while markets are pricing in almost a full 25-basis-point hike by December 2026.
When Are are the Interest Rate Decisions for Sweden’s Riksbank in 2026?
Here are the key interest rate decision dates for Sweden’s Riksbank in 2026:
- Jan. 29
- March 19
- May 7
- June 17
- Aug. 20
- Sept. 24
- Nov. 4
- Dec. 16
