Swedish Interest Rates Expected to Hold Steady in September

Swedish interest rates will likely stay unchanged in September despite rising inflation. Household budgets and mortgage holders in Sweden can expect short-term rate stability.

Statistics Sweden will release new national inflation figures on Monday. Analysts forecast August inflation at around 1 percent using the CPIF measure. This is slightly higher than July but remains low.

Swedbank chief economist Mattias Persson said a September hike would be a real surprise. Temporary government tax cuts on petrol and food are keeping current inflation down. However, underlying costs for clothing, food, electricity, and fuel are increasing.

Persson projects underlying inflation to reach 2.6 to 2.7 percent next spring. This forecast exceeds the Swedish Central Bank target of 2.0 percent. Most analysts now expect one or two rate increases later this autumn.

Danske Bank chief economist Susanne Spector now expects a rate hike in November instead of September. Analysts say major surprises in Monday's data could still alter these plans.

This report was originally published by Sweden Herald.