Key Takeaways
- The Riksbank kept its policy rate at 1.75% at its August meeting, saying the economic outlook “remains largely unchanged” despite a summer of above-forecast inflation and growth.
- Sweden’s central bank sees underlying inflation close to its 2% target but is not convinced the summer’s higher readings mark a lasting shift in price pressures.
- Most analysts do not expect a rate hike until 2027, though DNB Carnegie has brought forward its call for a first hike to December 2026.
Sweden’s Riksbank left its policy rate unchanged at 1.75% at its fifth meeting of 2026, in a unanimous decision that broadly reiterated the message from June.
“The Executive Board therefore assesses that it is a well-balanced policy to leave the policy rate unchanged, and that the probability of a rate increase later this year remains,” the Riksbank says, pointing to the June rate path, which implied a roughly 50% probability of a 25-basis-point hike before year-end.
Inflation Has Surprised to the Upside but the Picture Is “Not Clear-Cut”
Both growth and inflation have come in above the Riksbank’s June forecast over the summer. CPIF excluding energy rose to 0.60% year over year in July, the third straight month above expectations. Second-quarter GDP also surprised, rising 1.4% from the previous quarter against the Riksbank’s projection of 0.9%.
The Riksbank says underlying inflation that strips out energy prices and the effects of temporary fiscal measures “is relatively close to 2%.” But the central bank is not convinced the summer readings mark a lasting shift. At a press conference, Governor Erik Thedéen attributed much of the surprise to volatile prices on international travel.
“However, the picture is not clear-cut; for instance, companies’ pricing plans have been subdued and disruptions in global supply chains have declined,” the Riksbank says. “If the unexpectedly high inflation during the summer were to be the start of a larger and more lasting upturn in inflation, the Riksbank would adjust its monetary policy in a tighter direction.”
Labor Market Weakness and Geopolitical Risks Back Wait-and-See Approach
The labor market has continued to underperform, with the Riksbank acknowledging that developments have been “somewhat weaker than expected.” With unemployment still high, the central bank has room to hold back on policy shifts.
Geopolitical risks remain elevated. The war in the Middle East continues to disrupt supply chains, and the Riksbank warns there is “still a risk of underlying inflation becoming too high in the wake of the supply shocks.” Oil prices have come down since the spring, but the underlying cause of disruptions remains and the Riksbank says “there is as yet no peace agreement between the United States and Iran.”
The Key Riksbank Interest Rate Decision Dates
Here are the upcoming interest rate decision dates for Sweden’s Riksbank:
- Sept. 24, 2026
- Nov. 4, 2026
- Dec. 16, 2026
- Feb. 3, 2027
- March 24, 2027
The next decision on Sept. 24 will include a full monetary policy report with new forecasts and a rate path.
Will the Riksbank Raise Rates This Year?
This was a Monetary Policy Update meeting, meaning the Riksbank did not publish new forecasts or an updated rate path.
Handelsbanken senior economist Magnus Lindskog reads the tone as more dovish than the market had priced, a view he says was confirmed by the market reaction, with short-term rates falling about 6 basis points and the krona weakening. He sees a very low probability of a September hike.
“We maintain our view that the Riksbank will remain on hold through 2026, with a first hike in March,” Lindskog says.
Nordea’s Torbjörn Isaksson also sees no strong signal that a September hike is coming. “Inflationary pressure is moderate at the outset, giving it scope to wait and see,” Isaksson says. Nordea expects two rate hikes around mid-2027, though Isaksson notes that risks are skewed toward hikes coming sooner. He flags the krona as a key variable: If an ECB rate hike in September were to weaken the Swedish currency, inflation risks could rise enough to force the Riksbank’s hand.
DNB Carnegie’s Ulf Andersson takes a more hawkish view, expecting a first hike in December followed by two more in 2027, taking the policy rate to 2.50%. DNB Carnegie forecasts GDP growth of 2.2% in 2026 and 2.3% in 2027, with core inflation stabilizing around 2.3%.
