Sweden's central bank left the policy rate at 1.75% for a 12th consecutive month—the lowest in the EU—and said it is prepared to tighten policy this year if the Iran war accelerates inflation. Governor Erik Thedéen said a hike later this year remains possible; in June the bank placed a 50% probability on a 25bp rise in 2026 and warned that unexpectedly high summer inflation that signals a broader, more persistent increase would prompt tighter policy.

2026-08-20

Sweden's central bank left the policy rate at 1.75% for a 12th consecutive month—the lowest in the EU—and said it is prepared to tighten policy this year if the Iran war accelerates inflation. Governor Erik Thedéen said a hike later this year remains possible; in June the bank placed a 50% probability on a 25bp rise in 2026 and warned that unexpectedly high summer inflation that signals a broader, more persistent increase would prompt tighter policy.