Key Takeaways
- Economists expect Sweden’s central bank to leave its policy rate unchanged at 1.75% at its Aug. 20 meeting.
- Inflation excluding energy is higher than forecast and economic growth has accelerated, strengthening the case for rate increases.
- Some economists don’t expect interest rates to change until 2027 as oil prices soften and domestic employment data remains weak.
Sweden’s Riksbank is expected to keep its policy rate unchanged at 1.75% on Aug. 20, with the central bank’s comments closely watched for any shift in tone after a summer of unexpectedly strong inflation and growth data.
This is the first meeting of Sweden’s central bank since June, when the executive board raised its near-term interest rate path to imply a roughly 50% chance of a rate hike before the end of the year. Economists say that strong growth data since then will test whether policymakers need to revise that signal higher.
Summer Inflation Surprises Complicate the Picture
Price pressures in Sweden have surprised to the upside this summer. The Consumer Price Index with a Fixed Interest Rate (CPIF) excluding energy rose by 0.60% year over year in July. That is the third straight month above the Riksbank forecast and above June’s inflation rate of 0.40% and May’s 0.50%. Growth has also come in stronger than expected: Second-quarter GDP rose 1.4% from the previous quarter, well above the Riksbank’s forecast of 0.9% and the fastest pace in two years. Year-over-year growth was 2.8%.
A Weak Labour Market Gives the Riksbank Room to Wait
Despite the stronger inflation and growth readings, the labor market has continued to underperform the Riksbank’s forecast. Employment has run below expectations even as some indicators showed signs of stabilizing over the summer. That weakness is a key reason most analysts still expect the Riksbank to hold steady in August. A question heading into autumn is whether the improving economy feeds into upcoming wage negotiations, which could bring forward the timeline for a hike, analysts say.
Will the Riksbank Raise Rates Again This Year?
Handelsbanken’s chief strategist Claes Måhlén expects the Riksbank to largely repeat its June message in August, though Riksbank governor Erik Thedéen is expected to signal potential increases to interest rates in the future. Handelsbanken’s own forecast doesn’t predict a rate hike until December 2027, pointing in particular to oil prices that remain well below the Riksbank’s June assumption after the agreement to reopen the Strait of Hormuz eased the summer’s supply fears.
Nordea’s chief economist Annika Winsth doesn’t expect a rate hike until mid-2027. The Hormuz agreement has eased global inflation risks and pushed down oil prices, she says, while Swedish inflation still runs well below the Riksbank’s 2% target. Winsth says that a weaker Swedish krona could contribute to higher inflation further out, but doesn’t expect it to prompt a near-term hike on its own.
When Are the Next Interest Rate Decisions for Sweden’s Riksbank?
The upcoming rate decisions will be announced on the following dates:
- Sep. 24, 2026
- Nov. 4, 2026
- Dec. 16, 2026
- Feb. 3, 2027
- March 24, 2027
