Sweden's Riksbank cut its policy rate by 50 basis points to 2.75% on Thursday, 7 November 2024, doubling the size of the reductions it had applied at previous meetings.
BOARD SIGNALS FURTHER CUTS IN DECEMBER AND FIRST HALF 2025
Alongside the rate announcement, the Riksbank published updated forward guidance indicating that the policy rate could be cut further at the next meeting in December and during the first half of 2025, if the outlook for inflation and economic activity remained the same. The central bank framed this projection as conditional rather than a commitment, noting that should data surprise to the upside on either growth or prices, it retained the flexibility to pause or slow the pace of future reductions.
The Riksbank noted that variable mortgage rates charged to households had fallen roughly as much as the policy rate since the start of the year, and expected household consumption to rise as real wages increased and interest rates fell.
INFLATION AND NEXT MEETING
The US Federal Reserve and the Bank of England both reduced rates by 25 basis points on the same day. The Riksbank said it would keep the pace and extent of further easing under review at subsequent meetings, with the next decision scheduled for 19 December 2024. The Riksbank noted that unusually low energy prices had pushed CPIF inflation below 2%, while inflation excluding energy remained close to the target.