Educational analysis, not investment advice.
On 12 November, Statistics Sweden published the definitive consumer-price figures for October. Inflation according to KPIF, the Riksbank’s target measure, was 1.1%, down from 1.5% in September. The CPI rate was 0.9%. The measure that excludes energy as well, KPIF-XE, was 0.1%, down from 0.5%. That is the “near zero” print behind today’s question, posed this morning in Dagens industri: why raise the policy rate when inflation excluding energy has fallen this close to zero?
The short official answer is that the Riksbank did not wait for this print, and does not set policy on the latest monthly rate alone. The Executive Board decided on 3 November, and announced on 4 November, to raise the policy rate by 0.25 percentage points to 2.00%. The new rate has applied since 11 November. It is the first change since the rate was left at 1.75% in September 2025. At the time of the decision, the latest full CPI release was still September.
What October’s figures actually show
Month on month, the CPI and KPIF baskets were unchanged in October. The annual rate was pulled up mainly by energy. Fuel prices were 25% higher than a year earlier, with diesel up 38% and petrol 16%; electricity was up 14%. Those energy items were the largest positive contributions to the annual CPI rate. They were offset, above all, by food and non-alcoholic beverages, which were 7.0% lower than a year earlier and subtracted a full percentage point from the CPI rate. Dairy products, chocolate, sugar, sweets and desserts were among the food items that fell most. Prices for dental care and local transport were also lower than a year earlier, following reforms in both areas.
That mix is why headline KPIF can sit at 1.1% — still clearly below the 2% target — while the energy-adjusted measure is close to zero, and why the two can move apart when energy is rising. KPIF is the target variable: it contains the same goods and services as CPI, but holds mortgage rates fixed, so a policy-rate change does not mechanically feed into the target measure.
What the Riksbank said it was doing
The November decision came with a Monetary Policy Update, not a new forecast. The Board pointed back to the policy-rate path published in September, and said that if the inflation and activity outlook holds, it is likely that the policy rate will be raised further in the coming year, in line with that path. With that policy, inflation is expected to stabilise around the 2% target after a time.
The September path, still the latest published one, is expressed as quarterly averages: 1.85% in the fourth quarter of 2026, then 2.07%, 2.24% and 2.38% over the first three quarters of 2027, and 2.41% in the third quarter of 2028. Those are assessments, not a promise. A hike to 2.00% from 11 November is the first step on that path, not a new one.
The reasons given on 4 November were forward-looking. In September, KPIF inflation was 1.5%, in line with the Riksbank’s forecast. Inflation was still being held down by the direct effects of temporary fiscal measures; excluding those, the Riksbank put September KPIF at 3%. The underlying measure that also excludes energy was 1.6%, a little lower than expected, but indicators still pointed to above-normal cost pressures. Preliminary figures showed GDP and employment rising in the third quarter, in line with the forecast. The Board’s judgement was that stronger economic activity, cost increases from supply disruptions linked to the war in the Middle East, and a weaker krona this year would push both KPIF and underlying inflation above 2% next year.
The minutes, published on 10 November, record no reservations. All five members of the Executive Board — Erik Thedéen, Aino Bunge, Per Jansson, Anna Seim and Göran Hjelm — supported the proposal to raise the rate to 2%.
The Board also listed risks on both sides: that supply disruptions persist and inflation overshoots; that the upturn in activity runs faster than expected; that the labour-market recovery is weaker than it looks; and that global demand disappoints, including through geopolitical uncertainty, concern about AI investment, and weak public finances in some countries.
What this does and does not settle
Today’s definitive October figures confirm the flash estimates that SCB released on 5 November, the day after the rate announcement, and which we noted in our 5 November post on money, rates, prices and houses. They do not, by themselves, overturn or confirm the Riksbank’s 2027 inflation view. That view is about what happens as temporary fiscal effects fade, energy costs feed through, and the economy moves closer to normal conditions — not about a single month’s energy-adjusted rate.
The next monetary policy meeting is on 15 December, with the decision and a full Monetary Policy Report, including new forecasts, due on 16 December. By then the Board will have this definitive October print, and SCB’s next flash CPI is due on 4 December.
This is an explanation of a published decision and of published statistics, not a forecast and not investment advice.
Sources
- Sveriges Riksbank, press release 4 November 2026, “Policy rate raised to 2 per cent”; Monetary Policy Decision November 2026; minutes of the monetary policy meeting on 3 November 2026 (published 10 November); press release 24 September 2026 and the September policy-rate path.
- Statistics Sweden, 12 November 2026, definitive CPI for October 2026.
- Trigger: Dagens industri, Nils Åkesson, 12 November 2026, “Därför höjer Riksbanken trots inflation nära noll”.
