Riksbank on Hold — We Continue to See a Hike in December as Likely

Economics Research 20 August 2026 | 10:48AM BST

Riksbank on Hold — We Continue to See a Hike in December as Likely

BOTTOM LINE: The Riksbank’s Executive Board kept the policy rate unchanged at Katya Vashkinskaya | 1.75% today, in line with our and consensus expectations. The Executive Board Goldman Sachs International signalled that while “both growth and inflation have been higher than was forecast in June, and there is still a risk of underlying inflation becoming too high”, “the outlook for the economy remains largely unchanged” and “the probability of a rate increase later this year remains”, somewhat more dovish than we expected. The Monetary Policy Update acknowledged considerable uncertainty from the war in the Middle East, but some normalisation in measures of supply shocks, and noted better economic activity data and signs that “the economic situation will strengthen further going forward”. It also highlighted that as inflation was higher than expected over the summer, “inflationary pressures have declined but are still higher than normal”. Given the broadly unchanged guidance, with openness to tighten rates later in the year contingent on the inflation upturn proving more lasting, we continue to expect the Riksbank to stay on hold at the upcoming meetings and start raising the policy rate in December, followed by one more hike to 2.25% in 2027. We continue to believe the Executive Board will need to see more evidence of the energy shock along with stronger activity generating broader and more persistent inflationary pressures, with the August and September inflation prints being key for this assessment.

Riksbank Policy Rate: 1.75%, GS: 1.75%, Consensus: 1.75%, Previous: 1.75%.

1. The Riksbank’s Executive Board kept the policy rate unchanged at 1.75% today, in line with our and consensus expectations. The communication appeared balanced, which, in the context of recent data surprises, sounded somewhat dovish. The Monetary Policy Update (MPU) stated that while “both growth and inflation have been higher than was forecast in June, and there is still a risk of underlying inflation becoming too high”, “companies’ pricing plans have been subdued, disruptions in global supply chains have declined and the labour market has been somewhat weaker than expected”. While there was no explicit reference to the policy rate path from the June meeting (which indicated some probability of a hike this year), it mentioned that “the outlook for the economy remains largely unchanged” and “the probability of a rate increase later this year remains”. The limited forward guidance provided focused on the outlook for inflation, stating that “if the unexpectedly high inflation during the summer were to be the start of a larger and more lasting upturn in inflation, the Riksbank would adjust its monetary policy in a tighter direction”. During the press conference, Governor Thedéen emphasised that while there are concerns about recent inflation outcomes, which could point to a risk for the

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inflation outlook, there is no acute threat from inflation, albeit uncertainty remains high.

2. No new projections were published after the meeting, but the Executive Board acknowledged several developments from the June meeting, broadly in line with our expectations. First, it noted that the war in the Middle East continues to impact the global economy and create considerable uncertainty, but acknowledged that “the effects on the oil market have been less than in the spring” and that the “measures of supply shocks in global supply chains have declined”. Second, it noted that while the economy is approaching normal activity, with indications that “the economic situation will strengthen further going forward”, “the labour market has developed somewhat weaker than was assessed in June”. It, however, did not sound alarmed, stressing that “it is normal for the labour market to improve with some lag when economic activity increases”. Finally, the MPU discussed the inflation…