Sweden raises key interest rate again to target inflation

STOCKHOLM –

Sweden’s central financial institution on Wednesday raised its key rate of interest, saying inflation “is still far too high and underlying inflation has been much higher than expected.”

Riksbanken raised its coverage price by half a share level to three.5% and added that it’ll “probably” be raised additional by a quarter-point in June or September.

“The high inflation affects in particular households that have small margins to begin with, but the development is negative for the whole economy,” the central financial institution stated in a press release.

Annual inflation final month hit 10.6%, down from 12% in February.

“Low and stable inflation is a necessary condition for good economic development. It is important for confidence in the inflation target that inflation falls clearly this year,” the financial institution stated. “With the monetary policy conducted, inflation is expected to fall back this year and to stabilize close to 2% during 2024.”

Following Wednesday’s improve, the coverage price is on the highest degree since October 2008, the Swedish news company TT wrote.

Central banks all over the world have been elevating rates of interest to fight inflation that has began to ease in lots of nations however continues to be painfully excessive, squeezing households and companies. Despite the collapse of two U.S. banks that stirred international monetary turmoil final month, the U.S. Federal Reserve, European Central Bank and others nonetheless hiked charges to take goal at value spikes.