Bunge urges gradual rate rises as inflation risks build
First Deputy Governor Aino Bunge says the Riksbank will probably need further rate increases after raising its policy rate to 2 percent. Inflation is forecast above target in 2027, but further tightening depends on the outlook holding.
Recovery brings renewed price pressure
Speaking at Swedbank in Stockholm on November 12, 2026, Aino Bunge defended the Executive Board's decision to raise the policy rate to 2 percent.
Sweden's economy is recovering broadly and approaching normal conditions.
Geopolitical tensions, energy-market disruptions and the krona's weak performance during 2026 underpin forecasts that CPIF and underlying inflation will exceed the 2 percent target in 2027.
Bunge said tighter policy was justified to stabilise inflation over the medium term.
Further increases over the coming year depend on the outlook for inflation and activity holding.
She favoured gradual adjustments that allow each step to be evaluated, warning that raising rates too quickly risks testing the recovery.
Household demand sets pricing limits
Bunge cited geopolitics, rising energy prices and the AI boom as sources of inflation uncertainty.
Producer prices have risen sharply and companies' pricing plans remain elevated.
October inflation undershot the Riksbank's forecast, but its components still required examination.
Strong demand increases the risk that energy costs alter pricing behaviour; weaker household demand limits price increases.
Households' rate sensitivity matters.
Before December's decision, the Board will assess these factors alongside inflation and activity data from Sweden and abroad.
Gradual does not mean finished
Bunge's case for gradual adjustment accompanies a conditional case for further increases, not a commitment to stop.
Household demand is central to her assessment of companies' pricing power.
Her stated objective remains 2 percent inflation at the lowest possible cost to the real economy.