The Riksbank's First Deputy Governor Anna Breman said that the policy rate would have to remain restrictive for a considerable period of time and that she would not "tolerate high inflation becoming entrenched.”

Speaking at a Swedbank event, Breman, who backed the 25-basis-point hike in June, arguing at the time that another hike was probable in September and maybe after that, warned against any rapid reversal of tightening. (See MNI INTERVIEW: Riksbank Only Needs Gradual Hikes - Gov ThedeenThedeen)

By September "we will have received further information that could affect the economic outlook and inflation prospects. But it is already clear that monetary policy needs to be tightened for a significant period ahead,” Breman said.

The Riksbank's June rate projection showed the policy rate rising from its current 3.75% to at least 4.0% and remaining in contractionary territory. Breman said that since that June forecast round inflation had evolved broadly as the central bank had expected though growth had been weaker.