The Riksbank has conducted its own forecasts for the development of the interest rate since 2009 but has been further off the mark than other market assessors, the new report shows.
“On average over the three years (2007-2009) all market assessors had a tendency to exaggerate the repo rate, but the Riksbank had the worst analysis of all five forecasters,” the Riksbank wrote in its own analysis report published on Monday.
Riksbank chief Stefan Ingves had to withstand a wave of criticism after hiking the bank’s main base (repo) rate in September 2008, just weeks before the collapse of Lehman Brothers which sparked the deepest recession since the 1930s depression.
The bank has now concluded that its own analysis is regularly after the curve. The report states that the worst errors were made in July and September 2008 with significantly over-optimistic inflation forecasts. These erroneous forecasts laid the basis for the interest rate rises in July and September.
The other market assessors compared in the study were The National Institute of Economic Research (Konjunturinstitutet – KI), the Ministry of Finance, SEB and Swedbank.