The banks' forecast managers: That's how much the interest rate will be raised

On Thursday, new Riksbank governor Erik Thedéen will announce that the key interest rate will be raised by 0.5 percentage points to 3.0 percent.

This is predicted by the forecast managers at three of Sweden's largest banks.

This will mean that the key interest rate, which among other things affects mortgage interest rates, will be raised for the fifth time in a row.

- The Riksbank already signaled at the last meeting that more increases were to be expected.

Since then, the trend has gone in a direction that means they will want to tighten even more, says Andreas Wallström, head of forecasting at Swedbank.

Raised policy rates

The European Central Bank (ECB) on Thursday raised its key interest rate by 0.5 percentage points to 3.0 percent.

The day before, the US central bank (Fed) also raised the key interest rate by 0.25 percentage points to the range of 4.5-4.75 – the highest level in over ten years.

According to Andreas Wallström, the weak krona and the ECB's interest rate announcement are some of the factors that play into a likely increase in Sweden as well.

He believes that the Riksbank is probably concerned by the weak Swedish currency, which has fallen sharply against the euro and the dollar, which means that the Riksbank must in principle follow the ECB's announcement.

- We sit a little in the lap of the ECB, he says.

One last rate hike?

New figures show that inflation in the Eurozone and the US is falling.

This has led many to believe that interest rate increases are beginning to come to an end.

Håkan Frisén, head of forecasting at SEB, thinks he sees a glimmer of light on the horizon.

He believes that the expected increase may be the last.

- Our view is that it would be easiest for the Riksbank to take a 0.5 increase now and then stop.

- Some parts of the debate in Sweden indicate that the labor market partners and other interest organizations think that is enough.

There is such a long lag in the effects of interest.

Handelsbanken does not share that image.

They predict that they will signal another increase during the press conference next week.

- We think they will raise another 0.25 at their April meeting, but then lie still for the rest of the year, says Christina Nyman, head of forecasting, Handelsbanken.