The Riksbank’s monetary policy decision (08.30 BST) is likely to result in Sweden’s policy rate being cut even further below zero, from -0.25% currently. Admittedly, deflationary pressures have subsided a bit since the surprise cut in March, but it is unlikely that the Riksbank will want to ease off so soon. After all, headline inflation is only just positive and inflation expectations remain very low. “We think the Riksbank will reduce the policy rate to -0.40% and increase its government bond purchases.” says Capital Economics in a report
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