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Swedish Long-Term Inflation Expectations Edge Higher in Survey

(Bloomberg)

(Bloomberg) -- Expectations for Sweden’s long-term inflation rate rose slightly above the Riksbank’s 2% target as the central bank has started taking borrowing costs lower, the latest Prospera survey showed.

Results of the poll, commissioned by the central bank, showed that money market players see annual price increases with a fixed interest rate at 2.1% in five years, up from 2% in the previous month. 

Inflation in the biggest Nordic nation has slowed since a peak in early 2023. The Riksbank has responded by easing, and said last month that it could take its benchmark rate as much as three-quarters of a percentage point lower in the second half of this year if price increases continue to abate. 

Price data that will be released Friday is expected to show that the pace of inflation continued slowing in June, slipping below 2% as the annual comparison is affected by brisk price increases a year ago. This week’s release marks the first of two readings set to be published before the central bank announces its next rate decision on Aug. 19.

The Prospera survey also showed:

  • CPIF is seen at 2.0% in year 1 versus 1.9% in June.
  • CPIF is seen at 2.0% in year 2, from 1.9% in June.
  • Interviewees see the Riksbank’s policy rate at 3.4% in 3 months, down from 3.6% in June.
  • In 12 months, they expect the policy rate to be at 2.6%, and in 60 months at 2.4%.

 

©2024 Bloomberg L.P.

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