In August, the Riksbank kept its policy rate unchanged at 1.75%, assessing that the overall economic outlook remains broadly stable despite recent upside surprises in growth and inflation. Both variables have come in stronger than expected in June, and summer inflation data have heightened concerns that supply disruptions related to the Middle East conflict could lead to more persistent price pressures.
However, underlying inflation—excluding energy and temporary fiscal measures—remains close to 2%. In addition, subdued corporate pricing plans and easing global supply-chain bottlenecks indicate that inflationary pressures are not yet firmly embedded. Against this backdrop, the central bank judges the current policy stance to be appropriate, while keeping the door open to a rate hike later this year. It emphasized that a sustained acceleration in underlying inflation would trigger a tighter monetary policy response.
