The preliminary CPI inflation rate in Sweden for August 2025 was 1.1%, up from 0.8% in July. The monthly change in CPI from July to August was -0.4%.
As a result, CPI inflation was higher than the Riksbank’s and Swedbank’s forecasts, but in line with both Handelsbanken’s and SEB’s. Nordea had expected a slightly higher CPI rate of 1.2%
At the same time, the CPIF (Consumer Price Index with a fixed interest rate) rose from 3.0% in July to 3.3% in August. CPIF inflation also came in higher than many forecasters had expected, with only Handelsbanken getting it exactly right, while Nordea predicted a CPIF of 3.4%. The Riksbank’s forecast was 2.7%.
The monthly change for CPIF excluding energy, also referred to as the core inflation, came down from 3.2% in July to 2.9% in August. The 3-month change as well as the 6-month change remain above but closer to the 2% target.
Underlying Inflation is Coming Down
Thursday’s inflation figure is preliminary, which means that no details are included. The final inflation figures for August will be released Sept. 11. Despite the lack of details, economists argue that some of the upside might be due to lower-than-expected reversal from the surprisingly high price increases for car rentals and package holidays earlier this summer.
“If so, more might come in September, which will pull inflation down further,” writes Glenn Nielsen, economist Swedbank.
The gap between actual CPIF excluding energy and the Riksbank’s June forecast is now 0.2 percentage points, which according to Nielsen will make the Riksbank more confident about the fact that the surprisingly high inflation in early summer was, as argued, mostly due to temporary factors.
Although labelled as a “temporary summer bump”, the fact that CPIFXE remains above the Riksbank’s expectations puts the Riksbank board on the spot, according to Johan Löf, head of forecasting at Handelsbanken.
“A weak economy looks set to bring lower, maybe too low, inflation ahead and suggests an additional cut, but on the other hand CPIF inflation is far above target and the government is about to launch an unexpectedly large stimulus for 2026″, writes Handelsbanken’s Löf.
Will The Riksbank Cut Interest Rates in September?
The Riksbank has cut the policy rate twice in 2025, which now stands at 2.0%. This means that the policy rate has been halved from its peak in spring 2024. At the last meeting in August, the Riksbank assessed the summer’s unexpectedly high inflation as temporary, while pointing out that economic activity remains weak. The Riksbank announced then that it still sees a “certain probability of a further interest rate cut this year.”
However, it is not clear whether the Riksbank will cut the policy rate at the next interest rate decision on Sept. 23, and the forecasts from the major Swedish banks vary.
Handelsbanken and SEB are sticking to their forecasts of a further interest rate cut from the Riksbank at the September meeting. This would take the key rate to 1.75%. SEB’s senior economist Robert Bergqvist even go as far as to say that “the door is wide open for a rate cut in September, despite expansionary budget.”
Swedbank takes it one step further and are forecasting rate cuts at both the September and November meetings, bringing the policy rate to 1.50%.
“With inflation expected to continue falling toward the target in the coming months, the Riksbank will likely focus on stimulating the Swedish economy”, writes Glenn Nielsen, economist at Swedbank.
Nordea stands out among the major banks and believes that the Riksbank has delivered their last interest rate cut in this cycle, but point out that a lower core inflation means that the deviation from the Riksbank’s forecast decreased, increasing the probability for a rate cut.
“However, we are not there yet. Inflation is still too high, with headline CPIF inflation a full 0.5% point above the Riksbank’s view. Moreover, much suggest that GDP growth is picking up,” writes Torbjörn Isaksson, chief analyst at Nordea.
