Riksbank and Norges Bank Preview — A Hold in June

Research evidence excerpt

Riksbank and Norges Bank Preview — A Hold in June

diesel and petrol and a 50%

cut to the price of the public transport ticket starting in July) we updated our headline

inflation forecast and now expect headline inflation to average 1.1% in 2026 and 1.4% in

2027.

3. Swedish activity, meanwhile, continues to look broadly subdued, with the Q1 final

GDP print confirmed at -0.15%qoq (vs. 0.4%qoq Riksbank expected), as a rebound in

activity in March couldn’t offset a weak start of the year. The monthly

consumption-related indicators for Q2 have so far been mixed, with consumer

confidence declining to its weakest reading since last September in April but rebounding

slightly in May, and the economic tendency indicator continuing to print below its

historical mean for the past four months. The May labour market report surprised

negatively today, with the seasonally adjusted unemployment rate rising to 8.8% and

trend unemployment staying at 8.7%, above the Riksbank’s forecast for Q2. At the same

time, while the unemployment indicator over the next 12 months in the NIER Consumer

Tendency Survey declined slightly in May after a notable spike in April, it remains

elevated, and hiring plans in the Business Tendency Survey continued to moderate from

their recent peak in December, as selling price expectations moved up to its highest

reading since March 2025.

4. Given the recent guidance, subdued activity data and weaker domestic price pressure

now but clear upside inflation risk later, we continue to expect the Riksbank to stay on

hold in June and start raising the policy rate later this year to 2.25% in 2027. We,

however, do not expect the hikes to start before December as the Executive Board will

need to see evidence of the energy shock starting to generate broader and more