Nomura’s European Economics team, led by Josie Anderson, George Buckley, and Andrzej Szczepaniak, analyzed the latest decision by the Riksbank to keep its policy rate unchanged at 1.75% [1]. The team noted that the Riksbank maintained its economic outlook and expressed increased vigilance regarding upside inflation risks, while also indicating that a rate increase later in 2026 remains possible [1].
Nomura has revised its forecast, now expecting the Riksbank to raise rates in March 2027, rather than earlier. According to their projections, the policy rate is expected to reach 1.82% in Q4 2026 (up from 1.77% in the March forecast) and rise further to 2.00% in Q4 2027 [1]. The team expects CPIF ex-energy inflation to overshoot the Riksbank’s latest forecast, averaging 1.2% year-on-year in Q1 2027 and accelerating to 2.4% in Q2 2027, partly due to base effects from the April 2026 halving of food VAT [1].
Despite the possibility of a rate increase later this year, Nomura believes the Riksbank will maintain its current policy rate throughout 2024, citing persistently low headline inflation and the central bank’s tendency to look through temporary tax and fiscal measures [1]. The prospect of above-target inflation, especially if economic growth remains robust, could eventually prompt a rate hike, but policymakers are not expected to rush into tightening monetary policy [1].
CONCLUSION
Nomura now anticipates the Riksbank will delay its next rate hike until March 2027, reflecting ongoing concerns about inflation dynamics and the impact of fiscal measures. The unchanged policy stance and cautious outlook suggest limited immediate market impact, but the risk of higher inflation could influence future rate decisions.