The Riksbank raised the policy rate by 100bps, which was in line with market pricing but above our own and the consensus estimate. The rate path was slightly on the dovish side indicating 45bps higher policy rate in November and another 30bps in February. With inflation continuing to run high, markets will continue to price significantly higher rate hikes compared to the Riksbank’s rate path. We stick with our forecast for a policy rate hike by 75bps in November and another 25bps in February next year. Thus, we have revised our forecast for the policy rate next year to 2.75% from 2.50%. High inflation means that risks to the forecast continue to be skewed to the upside, although risks for a large decline for household consumption also needs to be taken into account.
- SEB
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