Riksbank chief says rate rise is no panic measure

Sweden’s central bank raised its key interest rate by 0.25 percentage points to 2.0 per cent on Wednesday, a move its governor Erik Thedéen described as a normalisation rather than an emergency response, SVT reported.

Thedéen said Sweden’s economy was performing strongly while businesses faced rising energy and raw material costs. The combination was a concern because companies might raise prices, adding to inflation.

“If we get high inflation, households will have less purchasing power,” Thedéen said in an interview on SVT’s Aktuellt.

The Riksbank expects two further rate increases over the coming year. Thedéen said the current rise was intended to “take our foot off the accelerator”, not to curb runaway inflation.