Swedish Inflation in October 2025 Hits Unexpected High of 3.1%, Core Inflation Rises

In October 2025, Sweden experienced an unexpectedly high inflation rate with the Consumer Price Index with fixed interest (KPIF) holding steady at 3.1%, surpassing both the Riksbank’s forecast of 2.7% and market expectations of 2.9%. Core inflation, which excludes energy costs, increased to 2.8% from 2.7% in September, defying market expectations of a decline to 2.6% according to Swedish newspaper Svenska Dagbladet (ID 131829). The preliminary Consumer Price Index (CPI) for October showed inflation at 0.9%, unchanged from the previous month (ID 132523).

The rising inflation, especially under the KPIF measure used by the Riksbank to monitor price changes assuming unchanged mortgage rates, reflects persistent inflationary pressures beyond volatile electricity prices, as noted by analysts like Johan Löf from Handelsbanken (ID 132523). Despite this, analysts are optimistic inflation will decrease below the central bank’s 2% target by 2026, supported by factors such as a stronger Swedish krona, increased global price competition from trade tensions, and stabilizing GDP and productivity growth (ID 132523).

In response to the inflation data, the Riksbank maintained its policy interest rate at 1.75% during its November meeting, signaling an end to recent cutting cycles. Although the market currently assigns a 60% probability to a possible rate hike by late 2026, experts suggest any increase in rates is unlikely in the short term (ID 132523). Over the course of 2025, Swedish inflation has fluctuated between 1.1% and 3.3%, with October’s figure aligning with September’s rate of 3.1% (ID 132518).

This steady yet elevated inflation hints at underlying economic momentum in Sweden, balancing between persistent price pressures and expectations of a future easing. The Riksbank continues to closely monitor these trends to guide monetary policy decisions critical to sustaining stable economic growth and price stability.