Riksbank signals inflation warning

The central bank has warned that the current labour shortage in Sweden could soon have an inflationary effect.

“If the labour shortage worsens companies may be forced to pay higher wages than was recommended in the financial policy report,” said Barbro-Wickman Parak, vice chairman of the Riksbank.

She also noted that the national accounts for the second quarter signalled a drop-off in productivity.

As for the recent financial unrest and liquidity problems on the international financial markets, however, Wickman-Parak was optimistic.

“There are currently no liquidity problems on the Swedish financial market. The market is working well,” she said.