Riksbank raises policy rate to 2 per cent: first increase since 2023 – further moves likely

Sweden’s central bank, the Riksbank, raised its policy rate by 0.25 percentage points to 2.0 per cent on 4 November. It is the first increase since September 2023. The new rate applies from 11 November. The bank also signalled that more may follow: if the outlook for inflation and the economy holds, a further rise within the coming year is likely. The move will be felt mainly by households with variable-rate mortgages.

Why the Riksbank is acting now

The Riksbank justifies the move by pointing to a stronger economy and to cost increases from supply disruptions, which it expects to push inflation up. Added to this are higher energy prices linked to the war in the Middle East and a krona that has weakened this year.

At first glance, price growth looks unremarkable: CPIF inflation stood at 1.5 per cent in September, below the 2 per cent target, as we reported in our article on September inflation. However, it is being held down by temporary government measures, such as lower VAT on food. Without them, it would be 3 per cent. The Riksbank expects inflation above 2 per cent next year, before it settles around the target again later on.

What may happen next with interest rates

So far, only the step to 2.0 per cent has been decided. Everything else is expectation. According to EFN, the Riksbank’s rate forecast from September points to a policy rate of around 2.24 per cent in mid-2027. New forecasts will not come until 16 December, when the next rate decision is also due.

Most commercial banks expect further moves in the spring but disagree on how far they will go. According to an overview by Placera, Nordea and Swedbank see the peak at 2.25 per cent, while Danske Bank, SBAB, SEB and Handelsbanken see it at 2.50 per cent. The Riksbank sees risks in both directions: if supply disruptions persist, inflation could run too high. On the other hand, the strength of the labour market recovery remains uncertain, and demand from abroad could weaken.

What the rise costs borrowers

Banks set their own mortgage rates and do not have to pass on the increase automatically. If they pass on the full 0.25 points, an example calculation by NU.se gives these additional costs before tax relief:

• SEK 1 million loan: around SEK 208 a month
• SEK 2 million loan: around SEK 417 a month
• SEK 3 million loan: around SEK 625 a month (SEK 7,500 a year)

With the 30 per cent interest deduction, the figure for SEK 3 million falls to about SEK 438 a month. According to Placera, Swedbank expects the average variable mortgage rate to rise from around 2.7 per cent to just under 3 per cent, and to 3.2 per cent after a second increase in February. That is a forecast, not a decision. Borrowers on a fixed rate are usually affected only when the fixed period ends.

What this means for travellers and people in Sweden

Anyone in Sweden with a variable-rate mortgage should check their loan agreement and plan for possible further increases, especially if their budget is tight. When comparing lenders, what counts is the average rate banks actually grant, not just their list rates. Negotiating can also pay off: according to NU.se, a rate 0.20 points lower saves SEK 6,000 a year before tax relief on a SEK 3 million loan.

People planning to move to Sweden and buy a home should work through the loan not only at today’s rate but also at the higher rates banks are expecting.

Little changes immediately for holidaymakers. According to EFN, the krona barely reacted on the day of the decision and was unchanged against the euro. Whether it strengthens or weakens in the coming months cannot be read from the decision. Most visitors pay by card in any case; our guide to paying in Sweden has more on this.

Sources

• Sveriges Riksbank – Styrräntan höjs till 2 procent (4 November 2026)
• EFN – Riksbanken höjer styrräntan – första gången på tre år (4 November 2026)
• Placera – Riksbanken höjer räntan – fler höjningar väntas (4 November 2026)
• NU.se – Riksbankens nya räntesmäll – så mycket dyrare blir ditt bolån (4 November 2026)