Research
Tip: To personalise the research list, click the gear symbol above.


Choose type:


Fast Comment SwedenRiksbank monetary policy decision: staying on course for December hike

  1. The Riksbank stays on hold in terms of policy rate and key communication
  2. Still signals rate hike toward the end of the year, but is that likely to materialise?
  3. We continue to expect the first rate hike in December
The Riksbank stays on hold in terms of policy rate and key communication
At its July meeting, the Riksbank's Executive Board decided to keep the policy rate at -0.50 percent, as widely expected. And as we anticipated (see our June 29 preview), the Riksbank also refrained from changing its key communication about future monetary policy, including the policy rate forecast. An important new point is that not only Deputy Governor Henry Ohlsson, but also Martin Flodén entered a reservation - Flodén wanted to signal a rate hike in September or October, while Ohlsson, like before, preferred to hike now.
Still signals rate hike toward the end of the year, but is that likely to materialise?
Ahead of this meeting, there has been a wealth of news for the Riksbank to digest. Not least communication from the ECB that many have interpreted as softer than expected. That alone could be a reason for the Riksbank to change policy in an even more expansionary direction. However, we believe that the current ECB message is actually roughly in line with the Riksbank's previous assumptions. On top of that, there has been news pointing policy in the opposite direction. A case in point is that the Riksbank's forecast for inflation has been revised up.
We continue to expect the first rate hike in December
Ultimately, we expect the Riksbank to raise the repo rate at its December meeting. We forecast inflation to stay at, or even above, the two-percent target. Inflation is now on a firm footing, with upward trending energy prices, a weak krona and gradual rises in underlying inflation and wage costs.

Disclaimer

Johan Löf

Senior Economist

Sweden

jolo22@handelsbanken.se

Latest analyses

2018-09-18

Fast Comment Sweden

2018-09-14

Fast Comment Sweden

2018-09-13

Fast Comment Sweden