Riksbank Interest Rate Hike Pushed to December Amid Inflation Uncertainty

According to recent forecasts from the Swedish bank SBAB, the Riksbank is expected to increase its key interest rate twice: first in December 2026 and again in February 2027. This update revises the earlier expectation of a rate hike in November, which has been postponed due to unexpectedly low inflation data reported in August.

Chief economist Robert Boije from SBAB explained that the low inflation outcome led to the decision to delay the initial increase. However, inflation is anticipated to pick up, prompting SBAB to predict that variable mortgage rates will rise by 0.5 percentage points by early next year, with long-term fixed mortgage rates increasing similarly.

SBAB also highlighted substantial uncertainty around forecasts for GDP, inflation, and interest rates. This unpredictability is influenced by ongoing geopolitical tensions and complexities surrounding the formation of a new government.

Economic indicators from SBAB project a 4% rise in housing prices for 2026. Additionally, GDP growth is expected to be 2.5% this year and 2.6% in 2027. The Riksbank is scheduled to make its next official announcement on September 24.

This shift in timing reflects the central bank's response to inflation trends and the broader economic environment, which continue to influence monetary policy decisions. The anticipated increases in interest rates are expected to directly impact mortgage payments and the housing market in Sweden.