The Riksbank said the rate hike, due to take effect on November 30, was necessary as the country’s 12-month consumer price index (CPI) hit 10.9 percent in October.
“Excluding energy prices, inflation has been unexpectedly high, indicating that inflationary pressures are somewhat higher than expected,” the Riksbank said in a press release, “it is very important that policy monetary policy acts to ensure that inflation recedes and stabilizes around the target”. 2 per cent within a reasonable time”.
This is the fourth rate hike since May this year, and the Riksbank also said more hikes were likely.
“The policy rate is expected to rise further early next year to then be just below 3 percent,” he said.
In its Monetary Policy Report, the Riksbank also said the country’s gross domestic product (GDP) is expected to shrink by 1.2 percent in 2023 before slowly starting to rise again in 2024. ■