Sweden’s central bank hiked interest rates by a full percentage point to 1.75 percent on Tuesday in a surprise move and warned that more was to come as it sought to get to grips with surging inflation.
The hike was the biggest since November 1992, when the Riksbank also raised its key rate by a full percentage point.
“Inflation has become higher than in the Riksbank’s previous forecast in June, and it is expected to rise further during the year,” the Riksbank said in a statement.
For the latest headlines, follow our Google News channel online or via the app.
“The forecast for the policy rate is that it will continue to be raised in the coming six months.”
There is little the central bank can do about the current level of inflation. But rate-setters do not want surging prices to spill over into higher wage demands, which would make the job of returning to the 2 percent inflation target much harder in the longer term.
Hikes will continue despite forecasts the economy is heading for a sharp downturn - possibly even a recession.
The overwhelming majority of analysts in a Reuters poll had forecast a 75 basis point hike this week. Two analysts expected a full percentage point.
Saudi inflation rate ‘still reasonable:’ Central bank governorSaudi Arabia’s central bank governor Fahad al-Mubarak said in a conference on Sunday that inflation in the kingdom is still within a reasonable ... Economy
France, Germany pledge to act together to support economy against inflationFrance and Germany pledged on Friday to act together to protect households and companies from soaring energy prices, while also using fiscal policy to ... Economy
India restricts rice exports, could fuel food inflationIndia banned exports of broken rice and imposed a 20 percent duty on exports of various grades of rice on Thursday as the world’s biggest exporter of ... World News