STOCKHOLM (Reuters) – Recent inflation outcomes in Sweden have been slightly higher than expected but it remains to be seen how much is due to temporary factors, Riksbank Governor Erik Thedeen said on Tuesday, adding that the situation calls for vigilance.
“It remains to be seen how much of this is due to temporary factors and what affects the inflation outlook in the slightly longer term, but it calls for vigilance,” he said in a statement ahead of a hearing in parliament’s finance committee.
“We are not overly concerned by individual (inflation) outcomes, but we have some indications that pricing plans have risen a little bit, so vigilance is called for,” Thedeen said during the hearing in parliament. “We are ready to act.”
Thedeen told parliament that current international turbulence, with uncertainty about global trade amid the U.S. administration’s tariff moves and higher market rates in Europe, made the outlook very difficult to predict.
The Riksbank, which has been cutting interest rates over the past year amid slowing inflation, is due to hold its next monetary policy meeting next week with the decision presented on March 20. Analysts expect no change in rates.
Sweden’s headline inflation accelerated to 2.9% year-on-year in February from 2.2% in January, a faster pace than analysts had expected and well above the central bank’s 2% target.
(Reporting by Niklas Pollard in Stockholm and Stine Jacobsen in Copenhagen, editing by Louise Rasmussen)
