The repo rate is now at 2.5 percent. The Riksbank cites stronger than expected economic growth in Sweden to motivate the move. It’s the central bank’s fourth interest rate increase this year, and was widely expected.
A report from the National Institute of Economic Research, also released Wednesday, confirms the picture of strong growth. But the institute urges the Riksbank to refrain from further interest rate increases this year, given Sweden’s low inflation.
Year-on-year inflation in July was 1.7 percent, well below the central bank’s 2 percent target.