MNI BRIEF: Riksbank's Jansson Thinks Rates Have Peaked

Riksbank Deputy Governor Per Jansson said inflation pressures were easing and that the evidence was clear enough to justify not hiking the policy rate any further from its current 4.0%.

In a speech at Handelsbanken, Jansson made clear that the tightening cycle in Sweden now appeared to be over, with the latest data suggesting inflation was on the downpath. The target CPIF measure was unchanged at 4.2% in October but in Jansson's view the outlook is for lower inflation ahead.

"I have become increasingly convinced that inflationary pressures are now actually declining," he said, “I think that there is now sufficient information for not raising the policy rate further."

The RIksbank's lastest rate path shows a small further rise above 4.0% but Jansson said this merely indicated the central bank was prepared to do more if necessary. All the Riksbank Executive Board backed unchanged policy at the November meeting but the board has yet to switch to discussing cuts, with debate focussed on the merits of unchanged policy and hikes. (See MNI RIKSBANK WATCH: Talks Tough On Hikes But Holds Steady)