MNI BRIEF: Recession Seen As Sweden Consumer Demand Dips- NIER

Swedish household confidence has fallen to exceptionally low levels by historic standards and retail demand looks set to suffer, according to a quarterly survey by NIER, the finance ministry's economic research group.

NIER's September survey household confidence indicator fell by 1.5 points to 69.1 while the retail confidence indicator decreased by 4.1 points, from 87.8 to 83.7. The headline economic tendency barometer edged up to 85.8 from 85.3 with manufacturing confidence rising and service sector firms anticipating price increases. The Riksbank is treading a tricky policy path, with the Swedish economy contracting and with inflation persisting above target.

NIER said that high inflation and rising interest rate had eroded household purchasing power and it forecast that the Riksbank would hike in November, that the recession would deepen and that the central bank would start cutting its policy rate from the third quarter of next year.