Erik Thedéen: Pleasing that inflation has fallen back

Mr Thedéen emphasises that high inflation and rising interest rates have been tough for many households and interest-sensitive companies, not least in the construction sector.

"Nevertheless, the economic slowdown has been much milder than we and many others feared. GDP growth has been weak in recent years, but despite some decline, the employment rate remains high.”

Outcomes abroad have also been stronger than expected. Developments in the United States stand out in particular, according to Mr Thedéen.  

"We seem to have a divergence with higher growth and inflation in the United States and weaker growth and lower inflation in Europe. Stronger growth in the United States could lead to higher inflationary pressures both there and globally, and this could also affect inflation in Sweden. Higher interest rates abroad could also affect the Swedish krona.”

However, Mr Thedéen reiterates that he does not believe that the Riksbank should link Swedish monetary policy directly to the actions of other central banks.

“It is inflationary pressures and the prospects for inflation here in Sweden that determine our monetary policy. In March, we signalled that a rate cut might be possible in May or June. But we also said that this depends on the inflation outlook remaining favourable. Before our next interest rate decision in two weeks' time, we need to analyse what the clearly lower inflation means for inflation in the longer term and weigh up the risks of inflation rising again.”