Sweden announces biggest rate hike in 30 years

STOCKHOLM, Sept. 20 (Xinhua) — Sweden’s central bank Riksbank on Tuesday announced its sharpest policy rate hike in almost 30 years, raising it by 100 basis points to 1.75% in a bid to curb surging inflation. I pulled it up.

This is the third rate hike following Riksbank’s February declaration to keep the policy rate at 0% until 2024.

“Inflation is too high and causing problems for households and businesses, so monetary policy must act,” Riksbank governor Stephan Ingves said at a press conference on Tuesday.

Tuesday’s rate hike was the highest since Riksbank introduced a 2% inflation target in 1993, but Ingves said the Swedes can expect more rate hikes.

“We expect interest rates to rise further in the next six months,” he said, adding that this will affect not only homeowners but also those renting homes.

He also said the trajectory of inflation is difficult to predict due to global events creating volatile markets.

“It’s a pity it took us so long to understand what was going on in the Swedish economy,” Ingves said.

The latest price increase will take effect from Wednesday.

“Riksbank was slow to see inflation coming, so they were forced to pull the emergency brakes and try to stop the train as soon as possible,” said Alexander Nollen, economic commentator for Swedish Television. He said. “This goes against what central banks should be doing, so it might be a little too fast,” he said.

Tuesday’s rate hike is expected and is expected to continue as inflation continues to surge, economists said, adding that economists expect the policy rate to reach 3.5% next summer.

Riksbank forecasts that Sweden’s Gross Domestic Product (GDP) will expand by 2.7% this year and contract by 0.7% next year.

Statistics Sweden said on Sept. 14 that Swedish inflation hit a 30-year high in August, with the CPIF (fixed-rate consumer price index) 12-month inflation rate rising from 8% in July to 9%. announced an increase of .