Riksbank Holds Rate at 1.75% but Signals a Hike This Year

Sweden’s central bank left its policy rate unchanged at 1.75 per cent on Thursday 24 September, but told households and businesses to expect it to rise, and possibly before the end of the year. The decision applies from 30 September.

What the Riksbank said

The Executive Board said economic activity is stronger than it expected in June and that supply shocks linked to the war in the Middle East are continuing. Taken together, it now judges that the policy rate “should be raised more going forward than projected in the June forecast” for inflation to settle around the 2 per cent target. If the outlook holds, the Board said, increases are expected to begin this year.

Why hold now

Measured inflation is currently low, largely because of temporary fiscal measures. Adjusted for those, the Riksbank says inflation is relatively close to 2 per cent, and there is still spare capacity in the economy. GDP grew faster than expected in the second quarter, partly for temporary reasons, and the bank sees signs of improvement in the labour market.

The risks it flagged

Oil, electricity and fuel prices have risen recently, and the krona has continued to weaken, both of which push prices up. The bank warned that supply shocks can feed through to prices more strongly when demand is firm, and said it would raise rates faster if inflation showed signs of a larger and more persistent upturn.

What it means

For borrowers with variable-rate mortgages, the message is that the period of steady rates is likely ending. Economists surveyed by Bloomberg before the meeting expected a rise to 2 per cent before year-end, earlier than the first-quarter-2027 hike they had forecast a month before. Bank deposit rates usually move with the policy rate, so savers could see some benefit once increases begin.

Reporting: this piece draws on and credits Sveriges Riksbank’s press release of 24 September 2026, and the economists’ survey reported by Bloomberg.