MNI BRIEF: Inflation Risks Pushed Riksbank Action - Minutes

Countering the risk of higher inflation becoming entrenched in second round effects pushed the Riksbank into a much earlier than originally forecast rate hike, the minutes of the April meeting confirmed.

The Riksbank policymakers said inflation has risen rapidly, both abroad and in Sweden, noting that the upturn in the rate of price increase in Sweden is now broad-based, and not merely driven by rapidly rising energy prices. Even excluding energy prices, inflation is at the highest level since the early 1990s, the minutes note.

All of the members supported the decision to raise the repo rate from zero to 0.25 per cent and to reduce the pace of the Riksbank’s asset purchases.