Swedish inflation falls to 0.7% as mortgage borrowers see no rate cut

Sweden’s consumer‑price index slowed sharply in June, with headline inflation dropping to 0.7% and the Riksbank’s preferred measure, KPIF, falling to an annualised 1.3%, well under the central bank’s 2% target. The slowdown was driven mainly by lower food and transport costs.

The Riksbank left its policy rate unchanged at 1.75% in its June 17 meeting and warned that supply disruptions linked to the Middle‑East conflict could reignite price pressures. As a result, mortgage borrowers are not expected to benefit from a rate cut, even though several banks have lowered their offered rates in a competitive “price war.” One analyst noted, "Det innebär att hushållens faktiska ränta kan påverkas av mer än bara Riksbankens styrränta."