Riksbank minutes show the board debating when, not whether, to raise rates
Serguey Asael Shinder2 min readThe minutes of the Riksbank's monetary policy meeting on 23 September, published on 30 September, show an Executive Board united on holding the policy rate at 1.75% and largely agreed that the next move is up. The question, as Governor Erik Thedéen put it, was not whether the rate will be raised but how urgently.
All five members supported leaving the rate unchanged and endorsed the forecasts. The policy rate path was revised up from June, and the board said that if the outlook holds, increases are expected to begin this year. Thedéen went further in his own contribution: it is reasonable to raise the rate as early as November, he said, and the path showing further increases next year is reasonable though very uncertain. First Deputy Governor Aino Bunge said it was right to wait but to communicate clearly that a rise before year end is likely.
The case for waiting rests on low measured inflation. In August, CPIF inflation was 0.7%, held down by temporary fiscal measures. Excluding the direct effects of those measures, it was 2.2%, and underlying inflation, CPIF excluding energy and fiscal effects, was 1.6%. The forecast has underlying inflation rising to just over 2% around the turn of the year. The case for moving soon is growth: GDP rose 3.3% year on year in the second quarter, with every part of domestic demand contributing, and the forecast now sees growth of almost 3% this year.
The market briefing at the meeting set the backdrop. Oil had moved above $100 a barrel on disruption to Saudi exports and shipping risks around Bab el-Mandeb, the Federal Reserve raised its rate by 0.25 points on 16 September, its first increase since 2023, and the ECB raised by 0.25 points on 10 September. Market pricing pointed to around five Riksbank increases by December 2027.
Why it matters
The Riksbank is preparing to raise rates while its own measured inflation is among the lowest in the EU, driven by growth and a weaker krona rather than by today's prices. The minutes make November the meeting to watch, with the governor's own words as the signal.