Swedish inflation

Market prices in five rate hikes

Interest rate traders anticipate that the Riksbank will raise the key interest rate to 3.00 percent by the end of 2027, according to a report from SEB. This equates to five hikes of 0.25 percentage points from the current level of 1.75 percent.

A couple of weeks ago, the market was pricing in four hikes over the same period, reports TT.

Driving these rising expectations is a higher global interest rate environment. This is fueled by the war in the Middle East, heightened inflation risks, interest rate hikes by central banks, and a stronger global economy. Significant government borrowing needs and concerns over growing national debt are also pushing up long-term interest rates.

If mortgage rates were to rise by a corresponding amount, a mortgage of two million kronor would become nearly 2,100 kronor more expensive per month before tax deductions.

SBAB expects the Riksbank to raise rates in December

In a new forecast, SBAB predicts that the Riksbank will raise the key interest rate in December and again in February of next year. This represents a postponement of the bank's previous assessment, which had anticipated the first hike in November followed by another in December.

"Due to the unexpectedly low inflation outcome in August, we have postponed the initial key interest rate hike," says Chief Economist Robert Boije in a press release. However, inflation is expected to rise in the near future, and with upcoming key interest rate hikes, variable

Experts: Higher cost of living ahead regardless of government

Regardless of who forms the government, global factors will drive up household costs, experts tell DI.

Rising market interest rates are leading to higher fixed mortgage rates. Furthermore, if the process of forming a government drags on, currency traders could become nervous and move their capital elsewhere.

"The krona would then weaken, and everything we import would become more expensive," Sharon Lavie, a savings economist at Lendo, tells DI.

Temporary fuel tax cuts are expected to expire this autumn, causing the impact of soaring oil prices to be felt even more acutely.

Electricity is also unusually expensive due to low reservoir levels, high gas prices, and nuclear power plants operating at reduced capacity. Meanwhile, drought conditions in Europe threaten to drive up food prices in Sweden.

mortgage rates are expected to rise by 0.5 percentage points by early next year.