(Bloomberg) -- The Riksbank’s next move in its battle to curb inflation remains shrouded in uncertainty, with a decision to keep rates unchanged in November a possibility despite concern over stubborn price increases on services, Deputy Governor Martin Floden said.
The comments come after the Swedish central bank raised interest rates by 25 basis points to 4% last week and said it could increase borrowing costs further to rein in inflation. According to Floden, the guidance for a peak rate of 4.1% early next year should be interpreted neither as indicating a clear signal that the Riksbank will hike again, nor that it will stay on hold.
“I would say for the coming meeting in November, and the subsequent meetings next year, it’s rather uncertain what we will do,” Floden said in a speech in Stockholm on Friday. “Even if things are going in the right direction, we are still a bit concerned, and you could argue that risks are on the upside, or at least that risks on the upside for inflation are high on our radar.”
As Swedish commercial real estate owners have come under pressure from increasing borrowing costs, Floden said monetary policy choices going forward won’t be adjusted to aid struggling landlords.
“I’m confident that we can raise the policy rate even more without getting a collapse of the Swedish economy,” he said. “If there are some specific problems in some sectors — I am not saying that fiscal policy should rescue that sector, but there is plenty of room to use fiscal policy to help stabilize the Swedish economy.”
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