Policy rate held at 1.75 percent as growth accelerates
Sveriges Riksbank's Executive Board decided unanimously to maintain the policy rate at 1.75 percent on August 19, 2026. The Board retained the probability of a rate increase later in the year as economic growth quickened and underlying inflation pressures lingered.
Faster second-quarter growth meets persistent price shocks
All five Executive Board members—Governor Erik Thedéen, Aino Bunge, Per Jansson, Anna Seim, and Göran Hjelm—backed leaving the policy rate unchanged at 1.75 percent.
Second-quarter GDP expanded by 1.4 percent quarter-on-quarter, outpacing the Riksbank's 0.9 percent forecast.
Although headline inflation remained subdued due to temporary tax cuts, adjusted CPIF inflation was 2.2 percent in July, with the measure excluding energy at 1.6 percent.
Three-month price momentum climbed toward 4.5 percent annualised, driven by travel service costs.
Board members noted that stronger domestic demand increases the risk that ongoing supply disruptions from the Middle East will feed into broader prices.
Global supply strains test economic resilience
Global supply chains face renewed strain as Middle East tensions persist and European droughts disrupt river shipping and power plant cooling.
While oil inventories and lower Chinese demand buffered energy prices during the summer, board members warned these buffers are temporary.
Governor Thedéen noted that “the wind has picked up and the speed has increased,” signaling that the next policy shift will likely be an increase once capacity constraints bind.
A tactical pause ahead of tightening
The Riksbank rightly looks past fiscal tax distortions, but holding rates steady as growth quickens risks falling behind.
Relying on temporary global energy buffers offers fragile protection against persistent supply disruptions.
Policymakers will soon need concrete tightening rather than cautious words to anchor price stability.