Key Takeaways
- The Riksbank left its policy rate unchanged at 1.75% at its sixth meeting of 2026, in a unanimous decision, but says the rate should be raised more going forward than in the June forecast to stabilize inflation around 2%.
- If the outlook for inflation and economic activity holds, the Riksbank expects rate increases to begin this year, a more hawkish signal than at either the June or August meetings, driven partly by an improved growth outlook: the Riksbank now sees 2026 GDP at 2.8%, up from 2.2% in June.
- SEB called the decision “surprisingly hawkish,” while Nordea says it was largely in line with expectations.
Sweden’s Riksbank left its policy rate unchanged at 1.75% at its sixth meeting of 2026, a unanimous decision that marked a clearly more hawkish signal than in June.
“The Executive Board assesses that the combination of a stronger economy and continued supply disruptions means that the policy rate should be raised more than in the forecast in the June Monetary Policy Report, for inflation to stabilize around 2 percent. If the outlook for inflation and economic activity holds, the Executive Board assesses that increases to the policy rate will begin this year,” the Riksbank says.
“The Riksbank’s message today was largely as we had expected,” says Nordea economist Torbjörn Isaksson. The bank maintains its forecast of a hike to 2.00% in November and another to 2.25% in February, which it expects to be the peak.
August Inflation Matched the Forecast, but Underlying Pressure Persists
Consumer price inflation assuming a fixed interest rate, or CPIF, came in at 0.7% in August and CPIF excluding energy at 0.5%, in line with the Riksbank’s June forecast. Stripped of the direct effects of temporary fiscal policy measures, inflation was 2.2% on the CPIF measure and 1.6% excluding energy in August.
“Indicators suggest that inflationary pressure remains above normal and inflation is expected to rise in the period ahead,” the Riksbank says. It raised its inflation forecast for both 2026 and 2027: CPIF is now expected to average 1.5% this year, up from 1.1% in the June forecast, and 2.1% in 2027, up from 1.7%.
Strong GDP Growth and Signs of a Firming Labor Market
GDP grew faster than expected in the second quarter, which the Riksbank says was partly due to temporary factors. At the same time, the upturn appears broad-based and sentiment in the economy has improved further. The Riksbank raised its 2026 GDP forecast to 2.8%, up from 2.2% in June.
The labor market shows some signs of improvement, according to the Riksbank. Employment rose according to the labor force survey (AKU) while unemployment was roughly unchanged, and the number of unemployed registered with the Swedish Public Employment Service fell slightly. Spare capacity remains in the labor market, however.
The krona has continued to weaken over the summer, in trade-weighted terms, since February, the Riksbank says. It is expected to strengthen again over the forecast period, which is expected to have a dampening effect on inflation further out.
The Riksbank Flags Upside Risks Tied to the War in the Middle East
“There remain risks that inflation could turn out higher than forecast. Since the war is still ongoing, the underlying cause of the supply disruptions remains. Prices for oil, electricity and fuel have risen recently, and in addition the krona has continued to weaken,” the Riksbank says.
Should signs emerge of a stronger and more persistent rise in inflation, the Riksbank would raise rates at a faster pace than in the current forecast, it says.
The updated rate path points to an average of 1.85% in the fourth quarter of 2026, up from 1.82% in the June forecast, and rises more steeply than previously projected: to 2.07% in the first quarter of 2027 (up from 1.89%), 2.24% in the second quarter (up from 1.93%), and 2.38% in the third quarter (up from 1.97%). According to the Riksbank’s own table, the path then continues to 2.41% in the third quarter of 2028 (up from 2.10% in the June forecast), before easing back to 2.35% by the third quarter of 2029.
When Are the Riksbank’s Next Interest Rate Decisions?
- Nov. 4, 2026
- Dec. 16, 2026
- Feb. 3, 2027
- March 24, 2027
- May 5, 2027
- June 22, 2027
Will the Riksbank Raise Rates Again This Year?
Nordea’s Isaksson reads the rate path as implying roughly a 65% probability of a November hike.
He also points out that the path keeps climbing beyond what the Riksbank itself reports, peaking, by Nordea’s own calculation, around 2.42% in early 2028 before easing back. One thing did surprise Isaksson: that the decision was unanimous. “We had expected Deputy Governor Anna Seim to vote for a hike already at this meeting,” he says.
Swedbank runs a similar calculation and arrives at a peak of 2.43% the same quarter. That implies closer to three hikes in total, Swedbank says, which poses some upward risk to its own forecast of just two hikes, in November and February.
SEB’s forecast had previously been the most dovish among the banks, with a forecast that put the first rate hike as far out as March 2027. In a note headlined “Surprisingly hawkish – November hike likely,” Amanda Sundström and Olle Holmgren say the Riksbank raised the rate path substantially more than expected, and that the new path signals a high probability of a hike as soon as November, plus two hikes by March 2027, with the rate seen reaching 2.50% by mid-2027.
“A November hike seems very likely,” SEB says, adding that it is awaiting the press conference before finalizing its own forecast, but that additional hikes in February and May are also likely. That would mean both an extra hike and earlier hikes than SEB had anticipated ahead of the decision.
Market reaction was relatively modest given how hawkish the decision was, SEB says, but the krona strengthened somewhat and short-term rates repriced to reflect a high probability of hikes at both the November and December meetings.
