Sweden’s central bank ‘still planning to raise interest rates in April’

The governor of Sweden's Riksbank central bank has told MPs he still intends to raise rates by at least 0.25 percentage points in April, despite the failure of several banks in the US.

Sweden's central bank 'still planning to raise interest rates in April'
The governor of Sweden's Riksbank Erik Thedéen, is questioned by the Committee on Finance in the Swedish parliament. Photo: Screenshot

“We intend to increase [the core interest rate] by 25 points,” Erik Thedéen said when questioned by the Swedish parliament’s finance committee about the impact of the US bank failures on monetary policy in Sweden.

But he said that his team at the bank would continue to monitor the situation. 

“We do not see any risks here and now, but we have a group at the Riksbank which is working 24/7 and following the developments and I expect that the Swedish Government Offices and the Swedish Financial Supervisory Authority are doing the same.” 

Interviewed by the TT newswire after his appearance in the parliament, Thedéen said that the failure of Silicon Valley Bank and Signature Bank in he US would without doubt affect Sweden. 

“It’s absolutely clear that what is happening in the financial markets now will have an impact on the data. It will, for example, be significantly more expensive for companies to finance themselves and it could be so that that will affect people’s willingness to consume and invest,” he said.

“The big spillovers for the Swedish economy are through lending costs, share price developments and the demand situation,” he said. 

However, Thedéen said that it remains his judgement that the risks to Sweden’s economy from overly high inflation exceeded those that would result from further increasing interest rates. 

“Inflation is worse than rent hikes,” he said. “We have a broad based inflation which we still haven’t been able to reverse in any clear way.” 

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Sweden still ‘a land of possibilities’ for foreigners says finance minister

Sweden's finance minister, Elisabeth Svantesson, has defended her government's decision to make cuts to some services used by foreigners, saying the country remains a 'land of possibilities' for newcomers.

Sweden still 'a land of possibilities' for foreigners says finance minister

Asked by The Local at an event in Malmö whether her government was hostile to foreigners, following cuts to funding for organisations like ABF, which among other thing teach Swedish to people who can’t study SFI, and also to the ethnic associations research shows can be an important tool for integration, Svantesson said Sweden still offered a lot to immigrants. 

“If you put it all together, we do an enormous amount to make sure that people from other countries can come in [to society], she said. “We take action upon action, and I’d argue that Sweden is a ‘land of possibilities’ for those from another country.”

She conceded, however, that the budget was being cut for folkbildning, the term for popular adult education organisations like ABF – which is linked to the Social Democrat party – or Medborgarskolan, which is linked to the Moderate Party. 

“Yes, the money for folkbildning is reduced, absolutely,” she said. “But there’s still a lot of money left.” 

She then ran through the ways in which Sweden was in fact very generous to foreigners newly arrived in the country. 

“You get free Swedish lessons at SFI [Swedish for Immigrants], and if you’re an asylum seeker, you can even get paid to study Swedish. We have the etableringsjobb [introductory jobs], which together with the unions and employers we are very keen to get going as soon as possible.” 

She added that education in Sweden was completely free, with some even paid to study.

So to argue that her government was “hostile to foreigners”, she concluded, was way off the mark. 

“I feel very confident, and secure and certain that anyone who truly wants to get on can go extremely far in Sweden.”  

The event, an informal meeting with the Moderate Party in Malmö on Wednesday evening, rounded off a day in which Svantesson had toured Skåne together with Sweden’s Prime Minister, Ulf Kristersson, vising an old people’s home in Åhus and a school in Broby. 

The intention was clearly to show that the government was concerned about the ability of municipalities and regional governments to fund education and healthcare, even though both regions and municipalities have complained that the extra funding they received in the budget last week is insufficient to cover the impact of inflation. 

The meeting, which was intended as “an open audience” with the two politicians, was attended by activists from the Extinction Rebellion protest group.

One after another, they interrupted the proceedings with statements about the increased emissions resulting from decisions taken by the government, several then sang a song, with each in turn dragged away by plain clothes police officers. 

An activist from Extinction Rebellion is dragged off the stage by security guards after interrupting the proceedings. Photo: Johan Nilsson/TT