Riksbank can reduce record-low interest rates – Aftonbladet

Riksbank can reduce record-low interest rates – Aftonbladet

Inflation increases slower than the Bank had anticipated.
Now, the already super low repo rate lowered even more.

According to some economists, the key rate can be screwed down to zero.

Home prices may fall 20 percent

This summer shock Riksbank lowered, with Stefan Ingves in the lead, the repo rate to a record low 0.25 percent. After the counted experts with interest the bottom was reached.

But now, according to figures from Statistics Sweden that consumer prices are rising at a much slower rate than the Riksbank forecast. From August to September, prices rose by a modest 0.2 percent. The inflation rate is 0.3 percent.

This makes it more likely that the Riksbank will lower record rate even more by the end of October.

– National Bank has said that the tolerance for inflation is lower than expected, is very small. In addition, authorities, politicians and Bankers Association has taken greater responsibility for household debt. This means that the Riksbank is now fully focus on inflation, says Anna Felländer, chief economist at Swedbank.

“Important to get inflation up ‘

The new figures do Swedbank change its forecast for the policy rate. The bank now expect the Riksbank to cut the repo rate by 0.20 percentage points to 0.05 per cent on interest rate meeting on 27 October.

Nordea and SEB are on the same line as Swedbank. Although Handelsbanken believe in a reduction, but mentions nothing about the size of the forecast.

– It is important to get up inflation. Deflation [prices fall, motsasen inflation, editor's note] may hamper wage and create uncertainty among households and businesses, says Anna Felländer.

Could be a zero interest rate

The economists at the Danish bank Nykredit goes even further than the major banks in their prognosis: In a comment, they speak of a zero interest rate.

“We can now say that the cut, in all likelihood, come back in October, when combined with a downward revision of court. lowered is size is an open question. possibly be a first cautious step, for example, 10 points. A reduction to zero can not be entirely excluded, “writes Nykredit according di.se.

Anna Felländer at Swedbank believes that a zero interest rates is unlikely.

– At 0.05 percent have exhausted the interest rate weapon. We believe that the Riksbank then may resort to other methods to get up inflation, but an interest rate of 0 is not in our forecast, she said.

So expensive can become your accommodation with new requirements