Riksbank holds rate at 2% amid inflation pressures, signals possible cuts later in 2025
Sweden’s central bank, the Riksbank, held its policy rate at 2% on 21 August 2025, citing higher-than-expected inflation and weak economic growth.
The bank indicated it may cut rates later this year but cautioned that inflation, company pricing behaviour and global geopolitical risks remain key concerns.
Domestically, household spending remains weak and the labour market shows slight improvement, though rising real wages, earlier rate cuts and stronger business confidence could support the economy.
Latest figures from Statistics Sweden show CPIF inflation at 3% in July, up from 2.8% in June, while unemployment reached 8.7% in the second quarter.
The rate decision, effective from 27 August, comes as inflation is expected to ease back toward the 2% target after a temporary summer increase.
