21 September 2022 | Other

Swedish interest rates rose by a full percentage point and they may be higher

As part of the fight against inflation, Sweden's central bank is raising interest rates. On Tuesday, they rose by a higher-than-expected full percentage point to 1.75%. The Swedish Central Bank has warned that interest rates will rise even more in the next six months.

In August, inflation reached 9%. This is the highest value in the last 30 years. The reason for this was a sharp increase in energy prices. Its effects have covered the economy and exceeded Riksbank's forecasts.

"When rates rise, it's obvious that interest costs for many households rise, but the cost of high inflation - sustained high inflation - actually rises even more," Governor Stefan Ingves told reporters.

Ingves added that raising rates now and in the future will help to reduce the risk of remaining at a high inflation level.

The inflation level at the moment in time is beyond the influence of the central bank. The desire of rate setters is that rising prices will not trigger higher wage demands, as the process of returning to the 2% inflation target level would become much more difficult in the long term.

Forecasts say Sweden's economy is heading for a sharp downturn, perhaps even a recession. But the rate increase will continue.

Company MarketCheese
Period: 31.07.2026 Expectation: 120 pips
Buying USDJPY from 162.355
Today at 12:27 PM 19
Period: 31.07.2026 Expectation: 500 pips
Invest in AUDUSD from 0.69810 support
Today at 12:27 PM 14
Brent sell
Period: 04.08.2026 Expectation: 700 pips
Brent crude sell-off targets $80
Today at 11:43 AM 22
Period: 28.07.2026 Expectation: 720 pips
Go long on AUDUSD with 0.70800 target before Australian employment data comes out
Today at 10:56 AM 9
Period: 21.07.2026 Expectation: 2050 pips
Buying BTCUSD on rising institutional demand
Today at 08:16 AM 20
Period: 28.07.2026 Expectation: 5000 pips
Invest in Tesla shares ahead of earnings release
Today at 07:09 AM 12
Go to forecasts