State Bank Predicts Higher Interest Rate

The state-owned bank SBAB predicts increasing interest rates in the summer and expects the central bank to raise its key interest rate in September. In its latest outlook SBAB states that the domestic economy is doing better than previously expected – leading to an overall growth of 2.2 percent this year and 3.3 percent next year.

Inflation will remain rather low and unemployment is likely to decline, according to SBAB. Putting together all these factors, an overheating of the housing market cannot be ruled out, warns SBAB. Consequently, interest rates as well as mortgages will have to go up, says the bank.