Swedish Riksbank reiterates further rate hikes
AFP - [email protected]
Published: 5 Feb, 2007 CET.
Updated: Mon 5 Feb 2007 12:34 CET
The Riksbank's deputy governor Irma Rosenberg said that since both the demand and supply sides of the Swedish economy are growing, it sees inflation being held back in the future, but reiterated that the central bank 'envisages' further rate increases.
"Productivity growth is strong and one cannot rule out the possibility that the growth in the labour force will be higher over the coming years than we have previously assumed, partly due to the government's proposals for tax and labour market policy reforms.
"Moreover, the oil price has fallen. It therefore appears as though inflation will remain subdued," Rosenberg said.
"All in all, I therefore see no reason today to proceed more quickly with
the interest rate increases than the markets were expecting (in) the weeks
prior to the monetary policy meeting in December," she added.
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"Productivity growth is strong and one cannot rule out the possibility that the growth in the labour force will be higher over the coming years than we have previously assumed, partly due to the government's proposals for tax and labour market policy reforms.
"Moreover, the oil price has fallen. It therefore appears as though inflation will remain subdued," Rosenberg said.
"All in all, I therefore see no reason today to proceed more quickly with
the interest rate increases than the markets were expecting (in) the weeks
prior to the monetary policy meeting in December," she added.
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