Good news for mortgage borrowers

Good news for mortgage borrowers

Now the risk of a new interest rate hike in Sweden is rising.

And there may be a bigger increase than expected.

Major bank SEB warns against this, SvD reported.

“Bitter Rise”

– Increases increase the likelihood that the Riksbank will continue to tighten. The announcements from Norway and Great Britain reinforced the need for a sharper increase from the Riksbank, SEB’s senior economist Robert Bergquist told the newspaper.

Norway and Great Britain’s central bank both doubled interest rates this week.

The interest rate in Norway was raised from 3.25 to 3.75 percent.

In Great Britain, interest rates rose to 5.0 percent.

The risk is increased

Now Robert Bergquist predicts a similar scenario in Sweden.

– Two central banks important to the Riksbank have now broken the pattern, exited the pause mode and given us a double increase. Wage risk is lower in Sweden, but krone & inflation problems are similar. The Riksbank issues interest rate decisions on 29/6 and 21/9. The risk of an increase of +50 points next week, the economist emphasizes in a post on Twitter.

Goes against the forecast

In April, the Riksbank raised the key interest rate by 50 basis points (0.5 percentage points) to 3.5 percent.

At the same time, the Riksbank flagged another hike in June. But that time only 25 points.

– Forecasts show that the policy rate could be raised by another 0.25 percentage points in June or September, the Riksbank wrote.

But after increases in Norway and Great Britain, the forecast should be revised upwards.

SEB’s Robert Bergquist thinks so.

He insists that Sweden has important trade ties with both countries – adding to the pressure on the Riksbank.

Also, the economist notes that Sweden is still struggling with high inflation and a stronger-than-expected growing economic cycle.

– A normal increase of 0.25 percent is not enough. Robert Berqvist tells SvD that the Riksbank will need to show they are ready to step up, and then a bigger increase, and that the Swedes should brace themselves for another increase in September.

Photo: M. Liz

Text: Compilers