Economy

Swedish inflation
Major banks: Mortgages will follow the key interest rate this autumn

If the Riksbank's interest rate path holds, mortgage borrowers can expect significantly lower interest costs at the end of the year, SEB's chief economist Jens Magnusson and Handelsbanken's macroeconomist Helena Bornevall tell DI.

- In the most recent reduction, virtually all mortgage institutions followed suit and lowered their variable mortgage interest rate by the same amount. It is reasonable to believe that the variable mortgage rate is 0.5 to 0.75 percentage points lower towards the end of the year, says Magnusson.

Handelsbanken predicts that their average interest rate will be 1 percentage point lower in a year. It stands at 4.6 percent today.

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Thedéen opens for interest rate cuts in August

After this morning's announcement that the interest rate will be left unchanged, Riksbank governor Erik Thedéen is open to a first interest rate cut in August.

- We have not said exactly when it will happen, but it depends on incoming data. But we see some likelihood of a cut in August, he said during a press conference on Thursday.

Thedéen pointed out that the Riksbank foresees continued easing and underlined that it is "right and reasonable" to bring monetary policy gradually towards a lower level. The forecast is for two or three reductions in the second half of the year.

When asked if it is not justified to lower the interest rate already now, in light of the government's statement that inflation has been defeated, Thedeen replies:

- We do not relate the monetary policy to the actions of the Prime Minister. Communication from the Minister of Finance and the Prime Minister must stand on its own.

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H&M's results in line with high expectations

Clothing company H&M increased operating profit by 50 percent in the second quarter of the company's broken financial year. The result was marginally below analysts' high expectations.

Sales rose in line with the advance tips and increased by just over 3 percent, while the operating margin increased to 11.9 percent from last year's 8.2 percent.

"During the second quarter, we have reached our best result and cash flow in many years", writes Daniel Ervér in a comment.

He states that the company is on track to reach its long-term profitability goal of over 10 percent, and repeats the goal of an operating margin of 10 percent this year.

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H&M's CEO flags for a more challenging second half of the year

H&M CEO Daniel Ervér repeats the clothing company's goal of an operating margin of 10 percent this year. At the same time, he points out that the conditions for this have become more challenging.

The reason is factors such as materials and currency changes, something he predicts will affect purchasing costs and sales revenue more negatively in the second half of the year than the company had previously anticipated.

"The most important prerequisite for reaching our goal is that sales growth is further strengthened in the second half of the year compared to the increase in the second quarter," he writes in the CEO's speech.