Swedish rates could go negative this week

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Handelsbanken Capital Markets has reportedly penciled in a further cut to the key lending rate from Sweden’s central bank this week, following further deflationary pressures feeding through to the economy.

The sharply falling price of oil in particular has come on top of other factors such as weaker than expected jobs creation, which already caused a 25 basis points cut in October. Now, the Riksbank is facing a challenge in meeting its inflationary target.

Nordea Markets said in a note last week that it expected a policy response this week in response to the weaker inflationary outlook. The bank may be forced to cut its consumer price index forecast by 0.25% for December and January, Nordea warned, as oil contracts point to a slowly rising price of $75 by the end of 2016.

 

 

 

ABOUT THE AUTHOR
Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 16 years he has been based in London writing about funds and investments . From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope.

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