The last time the Swedish Central Bank chose to lower the repo rate was in February, but from a market perspective, people are divided as to whether there will be another lowering on June 18 when the Swedish Central Bank announces its next interest rate decision.
We currently believe in a lowering now as well as another one in September, says Andreas Wallström, chief economist at Swedbank.
We believe that the Swedish Central Bank will lower first in August, but now chooses to open up for a lowering, but chooses to wait for more, counters Susanne Spector, chief economist at Danske Bank.
Opens up for lowering
This is a revised assessment of Danske Bank's view, from previously assessing that there would be no lowering at all. Susanne Spector means that by now in June opening more clearly for a rate, households are given some relief.
There are still risks, the price plans are high and inflation is above target, she says.
Swedbank, as well as Danske Bank, simultaneously shares the view that the weak BNP figures reported last week are a sign that the Swedish Central Bank will now need to stimulate the Swedish economy further by lowering the interest rate from the current level of 2.25 percent, the question is just how fast?
Andreas Wallström even stretches to say that the business cycle signals now even have greater significance than the inflation figures for May.
It's not set in stone and a rather uncertain situation, he says about a lowering in June. What stands and weighs is not inflation here and now, but rather the weakness in the business cycle. These figures were weak and support a lowering, he says about the BNP figures.
Full numbers will come later
Swedbank assesses that the so-called KPIF inflation, excluding energy, will amount to 2.7 percent in May, while Danske Bank in turn predicts 2.5 percent.
If inflation becomes lower than expected, the likelihood of an interest rate lowering increases.
The inflation figures on Wednesday are Statistics Sweden's (SCB) so-called quick variant, meaning that full data on, for example, food prices will not be reported until a week later.
