Riksbank Hints at November Rate Hike Amid Rising Inflation

The Riksbank is expected to leave interest rates unchanged at 1.75% on September 24, according to consensus among economists. However, external pressure from rising oil prices and more aggressive monetary policies from the European Central Bank and Federal Reserve may lead to a rate hike in November or December.

Swedish inflation has been muted this year, but is expected to rise as temporary tax measures expire and energy prices increase. The Riksbank's main scenario presented in June suggests that inflation will gradually move back above target, prompting the central bank to act pre-emptively.

The Riksbank's rate projections are expected to be revised higher to reflect a year-end hike, with a 4Q average policy rate of around 1.88%. This would mark a significant shift in the central bank's stance and support front-end SEK rates.