MNI Riksbank Preview - Aug '25: Inflation Interpretation Key

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EXECUTIVE SUMMARY: 

• The Riksbank is expected to hold rates at 2.00% on Wednesday, in an interim decision that includes a concise Monetary Policy Update instead of a new MPR or rate path projection. That will leave focus on the policy statement guidance.
• Heading into the August decision, the Board will need to weigh higher-than-expected spot inflation pressures against continued softness in labour market and activity data, alongside a higher-than-expected EU-US tariff outcome. The large upward inflation surprise in June, which was mostly consolidated in July, should guard against a surprise rate move.
• However, the Riksbank is sensitive to economic activity and has demonstrated a willingness to lend support with monetary easing already this year. This dovish bias will likely be reaffirmed if the Board views the summer inflation uptick as temporary (in a similar fashion to Q1).
• Analysts are unanimous in expecting rates to remain on hold at 2.00% in August, but there is more of a divide for the September decision. Of the 13 previews we have seen, eight expect a final 25bp cut to 1.75% in September, while five expect no further cuts.