MNI BRIEF: Swedish Mortgages A Vulnerability - Riksbank Head

Swedish households reliance on variable rate mortgages and the prolonged spell of krona weakness meant they were hit harder than in other countries during the period of high inflation and high interest rates, but the country's outlook is now relatively favorable, Riksbank Governor Erik Thedeen said.

"The cuts in the policy rate since May 2024 have improved the financial situation of many households, especially those with large loans" with the share of interest payments in household disposable income falling from a peak of around 7% to around 5% and "Our forecast is that the policy rate will remain roughly at the current level going forward," Thedeen said.

While Sweden's economic outlook is now relatively rosy the lessons of the recent past needed to be learnt, Thedeen said.  (see MNI INTERVIEW: Higher Bar To Future Riksbank QE - Thedeen ) Thedeen highlighted the need for regulation of levels of indebtedness and mortgage regulation.