SBAB predicts two interest rate hikes amid Hormuz Strait tensions

SBAB has revised its economic forecast, predicting two interest rate hikes by the Riksbank before the end of the year. The shift from the previous expectation of a stable 1.75 percent rate to potential increases in November and December is driven by rising global inflation pressures.

Chief Economist Robert Boije cites the ongoing conflict involving Iran and the potential prolonged closure of the Hormuz Strait as primary drivers. Such instability is expected to increase energy and transport costs globally. Additionally, SEB economist Robert Bergqvist noted that political promises of consumption-oriented measures could further complicate the monetary policy landscape.

In the broader market, the Stockholm Stock Exchange has seen recent declines, influenced by Middle East tensions and reports of a vessel attack in the Hormuz Strait. Meanwhile, new Swedish mortgage regulations, including a reduction in the required down payment from 15 to 10 percent, have led to a 14 percent increase in apartment sales during the summer.