Minutes of the monetary policy meeting held on 3 September 2014
At the Monetary Policy Meeting on 3 September, the Executive Board of the Riksbank decided to leave the repo rate unchanged at 0.25 per cent.
It was noted at the meeting that the Executive Board agreed on the picture of economic prospects and the inflation outlook described in the draft Monetary Policy Update.
Growth in the world as a whole is expected to gradually increase in the years immediately ahead, although the recovery will proceed at different rates. The economic signals from the United States and the United Kingdom remain strong, but at the same time a somewhat more sluggish recovery is expected in the euro area, partly as a result of the ongoing conflict in Ukraine. This will also dampen GDP growth in Sweden somewhat compared to the forecast in the Monetary Policy Report published in July.
However, the development of the labour market over the summer has been slightly stronger than expected and unemployment has begun to fall. Inflation remains low, although it has been somewhat higher than expected in recent months. The inflation forecast has been revised upwards slightly in the near term due to a weaker krona and somewhat higher labour costs.
On the whole, the economic and inflation prospects for the Swedish economy are the same as in July. Inflation remains low and the Executive Board agreed that the repo rate needs to remain at 0.25 per cent for inflation to rise towards the target. The assessment of the Executive Board was that it will not be appropriate to raise the repo rate until late 2015. With the adopted monetary policy, CPIF inflation is expected to gradually rise and to reach 2 per cent in early 2016.
At the same time, several members of the Executive Board noted that the low interest rates mean that there are still risks associated with the high level of household indebtedness and that it is necessary that other policy areas take measures to manage these risks.
Several members discussed the role of the repo-rate path in slightly different ways in light of the unusually high degree of uncertainty that prevails concerning economic and monetary-policy developments abroad.
Some members also discussed how monetary policy should react to new information and concluded that monetary policy should react asymmetrically in the near term so that new information that indicates higher inflation than expected does not necessarily have to lead to a less expansionary monetary policy.
Read the full minutes of the monetary policy meeting.
