“No more rate cuts” after Riksbank statement

The Swedish Riksbank's comments made in conjunction with its decision to leave the interest rate unchanged at 1.5%, confirm that no further rate cuts can be expected, French bank Calyon said on Wednesday.

“Although the overall language of the statement was perhaps not as hawkish as could have been expected after recent positive economic surprises, it nevertheless confirms that the case of further easing in Sweden is now effectively closed,” Calyon said.

The Riksbank was fairly upbeat in its forecasts and said it expects the inflation rate to return to the target level of 2% within a couple of years.

However it said it expects energy prices to play a part in this and sees “no

urgency” in raising rates.

Calyon said the Riksbank did however acknowledge that growth in the first half of the year was somewhat higher that it had predicted in June, when it slashed this year’s forecast to 1.9% from 3.2%.

This suggests that the next inflation report due out on Oct 20, will probably deliver an upward revision to this year’s growth forecast back to 2%, said Calyon.