Riksbank Preview — Holding and Waiting

Economics Research 13 August 2026 | 3:28PM BST

Riksbank Preview — Holding and Waiting

BOTTOM LINE: The Riksbank is widely expected to stay on hold at their upcoming Katya Vashkinskaya | meeting in August, in line with our forecast. At its last meeting in June, the Riksbank’s Goldman Sachs International Executive Board kept the policy rate unchanged at 1.75%, in line with our and consensus expectations. The communication, however, turned somewhat more hawkish, indicating increased openness to tighten rates later in the year, with the minutes revealing a broad range of views. Since the June meeting, Swedish inflation has printed above expectations, with July core inflation at 0.6%yoy and headline at 0.7%yoy, both above our, consensus and the Riksbank’s forecast, suggesting some firming in momentum. Swedish activity, meanwhile, has started to show the long-awaited signs of a recovery, with the Q2 flash GDP print surprising notably to the upside and consumer-related indicators pointing to likely healthy gains in private consumption. Given a somewhat hawkish shift in guidance and a streak of stronger data on both activity and inflation, we continue to expect the Riksbank to start raising the policy rate in December to 2.25% in 2027. At the same time, given a notable division among the Board members, we believe more evidence of broader and more persistent inflationary pressures would be required before warranting earlier tightening. We thus see near-term hikes as unlikely.

1. At its last meeting in June, the Riksbank’s Executive Board kept the policy rate unchanged at 1.75%, in line with our and consensus expectations. The communication, however, turned somewhat more hawkish, as the Executive Board guided that while “underlying inflation is low and economic activity is somewhat weaker than normal”, “the supply disruptions have led to a rise in inflationary pressures and increased the risks of inflation being too high”, mentioning concerns on potential changes in pricing plans and inflation expectations. The policy rate path was thus lifted up somewhat for 2026-2028, indicating a rising probability of a hike later this year, with the rate at 1.82% in Q4 (vs 1.77% before).

2. The June meeting minutes, in turn, revealed that the Board is quite divided in their assessment of the current economic situation and an appropriate policy response, but the majority still agreed with the “wait-and-see” approach, for now. However, in March, the “dovish” camp (Jansson, Hjelm, Bunge) provided no major pushback to eventual tightening and was more alert to a possibility of a tail risk and thus a more acute need for hikes, while in June, its opinion had split into two. Jansson argued against any insurance hikes (while seeing no conditions for big adjustments to be required), while Hjelm and Bunge supported only a modest path adjustment, reassured by the MOU signed between Iran and the US. The more hawkish members (Seim, Thedéen) again focused clearly on the upside risk to inflation, brought in a

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foreign inflation angle, not prominent before, and indicated readiness to act in case the effects clearly appear in Swedish inflation.

3. Since the Riksbank’s June meeting, Swedish inflation has printed above expectations after surprising notably to the downside at the beginning of the year. June core inflation (CPIF ex. energy) printed at 0.4%yoy, with headline inflation (CPIF) coming in at 1.3%yoy, both above what the Riksbank had expected. The July print confirmed this pattern, with core inflation at 0.6%yoy and headline at 0.7%yoy, both above our and consensus expectations, and the Riksbank’s forecast of 0.2%yoy and 0.5%yoy, respectively. This was driven by both core goods and services coming in stronger than expected, with components like clothing and footwear, furnishings, ICT equipment and hospitality-related services like accommodation contributing to the surprise. Despite the level being quite low (with core inflation below target even after adjusting for…