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Interest rate hike expected – KI believes in two hikes

Vilma Strömberg

 

Published 09.11Updated 11.24

The Swedish economy continues to recover and inflation is rising.

The Swedish Institute of Economic Research (KI) therefore expects a double hike in the interest rate.

The Swedish economy continues to recover and Sweden's GDP continues to grow. This is the assessment of the Swedish Institute of Economic Research in its forecast update.

- We see that the recovery in the Swedish economy has come a long way and we see that it will continue in the future, says forecaster Ylva Hedén Westerdahl.

GDP is expected to amount to 2.4 percent during the year.

Double hike

According to the forecast, the recession is also expected to ebb out in 2027, while household consumption is expected to increase.

The Swedish Institute of Economic Research also expects inflation to rise next year and that the Riksbank will therefore raise the key interest rate twice. First by 0.25 percentage points in December 2026 and then once more in 2027.

Sweden has had slightly longer inflation than both the US and the Eurozone, partly due to tax cuts that are pushing down prices.

– This time, fiscal policy is affecting inflation to an unusually high extent, with changed taxes among other things, but also with energy prices that are volatile, says Ylva Hedén Westerdahl.

According to the forecast, unemployment is also expected to decrease from this autumn.

Economist: The Vallöften can drive up the interest rate

Robert Bergqvist, senior economist at SEB, shares KI's view that the Swedish economy is heading towards a more normal situation and away from the recession.

– This should ultimately mean that we get more speed on the wheels of industry and have better finances in our wallets, he says.

But with a more normal economy, more normal interest rates should also be expected, says Bergqvist.

He warns that overly generous election promises from politicians ahead of the election this autumn risk driving up inflation, which in turn could lead to the Riksbank being forced to raise interest rates further.

– What our politicians give with one hand, the Riksbank may be forced to take back with the other hand, that is, higher interest rates, says Bergqvist.

– It is extremely important going forward that there is an interaction between what is done in the Riksdag and what is done in monetary policy.
  

 

London's parks yellow from record drought: "Like the Sahara"

 

Petter J Larsson

 

Published 05.24Updated 08.01

LONDON. Green Park is yellow.

The record heat has caused London's parks to dry out.

- Hopefully it can focus attention on the need to reduce our emissions, says climate scientist Shaun Fitzgerald.

Hyde Park's large lawns are almost completely deserted. Another heat wave has swept across England. On Thursday it will be 35 degrees.

And it hasn't rained properly for months. You can see it in the city's parks, which have completely changed color. The grass has dried out and is now yellow.

- The drizzle we got last week doesn't count, says a park ranger. A park worker empties water into the wells. Photo: Petter Larsson

He drives around Hyde Park with a large water can that he empties into the various wells on the lawn. The canister says the water comes from drilled wells and not from the municipal water supply. There is a water shortage – and watering with a hose is prohibited.

– It feels like we are an extension of the Sahara Desert, says the park ranger.

“We will have to get used to it”

Londoner Michael Fowler, 66, and his daughter Wren, 2, have braved the sun for a walk through Hyde Park.

– It is quite shocking. It has happened in previous years, but this time it has been like this all summer because we have had such a drought. And we will have to get used to this in the future, he says.

– I have been to the Libyan desert and we are not there yet, but that is where we are heading. It may not be long before this too becomes a desert.

Rupert Jeffcoat, 56, walks through the yellow landscape while reading a book, on his way home from work.

– It is worrying, he says.

– Climate change is real but many people live in denial. They don't understand that if this were to be solved, a lot of other things would also be fixed.

More than two-thirds in drought

On Monday, 71 percent of England was classified as affected by drought, writes the BBC. Around 45 million people live in areas now affected by drought, and over 27 million have been given restrictions on water use.

It was the driest July since measurements began in 1836. According to the UK's meteorological institute, the Met Office, an average of only 6.5 millimeters of rain fell during July. This is about a tenth of the month's normal rainfall.

At the same time, several heat records have been broken this summer. June was the hottest June ever measured in England, and 2026 is the first year when temperatures reached at least 35 degrees already in May, June and July.

– South-east England is dry, as this is a particularly hot summer. It’s a result of climate change, says Shaun Fitzgerald, a climate scientist and director of the Centre for Climate Recovery at the University of Cambridge.

– Statistically, we’re going to see more of these summers than we’ve had in the last 50 years. It’s no surprise, but it’s the new normal.

Fire risk

The grass changing colour is the least of the problems, says Shaun Fitzgerald.

– Much of the dead grass will recover when the rain comes, but there are other risks with parks and areas around London becoming as dry as tinder.

A fire engine with loud sirens ploughs north along Park Lane. With the drought, the fire risk increases, even outside the cities.

– We saw fires on the outskirts of London during the last major drought, and when the ground is as dry as tinder, the fire risk increases dramatically. We’ve already seen this around big cities like Madrid and Bordeaux, and the same development is expected in the UK, says Shaun Fitzgerald.

– There’s a fire in the New Forest right now, and recently there was a fire in Dunwich Heath on the Suffolk coast. This is no longer something that’s happening elsewhere – it’s happening in the UK right now.

“Very scary”

Alexandra Thannberger, 30, visiting London, is reminded of how the drought has affected her home country of France this summer.

– It’s very scary with all the fires we have in Europe, but it’s global warming. We’ve been talking about it for a long time and now people seem to have realised what’s happening. I hope it’s not too late.

Friends Katie and Gemma, both 18, have settled down on the grass. They’re almost alone in Hyde Park. Everyone else is crowding under the trees.

– We thought there would be a few more people here, but that’s okay, we can sit alone on this very dusty grass, says Katie.

– I give it a four out of ten for comfort. Zero out of ten for appearance. There's not much green here.

2,000 dead in Ebola outbreak

 

TT-AP

 

Published 09.32

 

A health worker cleans the floor of a hospital ward in Bunia, Congo-Kinshasa. Photo: Dieudonne Dirole/AP/TT

Congo-Kinshasa says 2,000 people have died in the Ebola outbreak.

That makes the outbreak the fastest-spreading Ebola outbreak on record.

704 patients are currently being treated. A total of 4,381 cases have been confirmed in the country.

According to the World Health Organization WHO, the outbreak started in February, but it was only discovered in May.