Riksbank to Prepare the Market for Rate Hikes Ahead

Dow Jones09-23 18:17

1017 GMT - The Riksbank will keep its powder dry for now, but prepare the market for rate hikes ahead, Nordea chief analyst Torbjorn Isaksson writes. External factors are the main reasons for the Riksbank to tighten monetary policy, he says. Above all, the war in the Middle East is pushing up oil prices and contributing to higher gas prices in Europe. In turn, this spills over to Sweden through higher fuel and electricity prices, prompting a significant upward revision to inflation forecasts, he says. In addition, the krona is on a clear weakening trend, which also warrants higher inflation forecasts, he adds. Nordea expects the Riksbank to keep the policy rate unchanged at 1.75% Thursday before raising in November and then again in February next year to a peak of 2.25%.

 

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