November 2025: On hold at 1.75% as expected – Repeating September message
|As widely expected, the Riksbank left the policy rate on hold at 1.75% and verbally reiterated the outlook from the September MPR, stating "The policy rate is expected to remain at this level for some time to come, in line with the forecast in September. " This was widely expected and should thus have no market impact in our view.
The Riksbank seems a bit more confident around the economic recovery, noting that recent data since the September MPR indicates a "somewhat stronger growth than expected". The labour market is still weak but is now showing signs of improvement with lay-offs at normal levels and increasing number of vacancies. The Riksbank also repeats the message from September that households' purchasing power should strengthen as interest costs fall and fiscal policy becomes more expansionary next year.
With regards to inflation, the Riksbank's picture is still that the higher inflation this year is temporary and that inflationary pressures are in line with the 2% target going forward. However, we do note that the Riksbank's chart on inflation indicators shows that the interval is widening with both, upside and downside risks to inflation increasing.
FX: Regarding the Riksbank's SEK view, it is also a copy paste from September, where the interesting thing is them using the word 'somewhat': "The Riksbank assesses that the krona will continue to strengthen somewhat going forward". The 'somewhat' instead of 'significantly' aligns with the relatively flat KIX path from June and September.
FI: Market pricing for the coming meetings remained unchanged, indicating no change in policy rate for the coming six months, and a tiny hiking bias thereafter.
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