Sweden’s Riksbank kept its policy rate at 1.75%, judging monetary conditions well balanced as growth and inflation have come in stronger than expected while the labour market has softened and companies’ pricing plans remain subdued. Underlying inflation is close to 2%, and summer readings were above the Riksbank’s June forecast, even as measured inflation stays low due to temporary fiscal measures.
Uncertainty From Geopolitical Developments
The central bank flagged uncertainty linked to the Middle East conflict, although the economic effects to date have been smaller than feared.
Policy Outlook Remains Cautious
Its outlook was described as broadly unchanged, yet policymakers left the door open to a possible rate increase later this year if inflation proves more persistent.
