Excerpt from the statement by the Executive Board of the Riksbank:
Economic developments both in Sweden and abroad have been in line with the forecast made by the Riksbank in July. There are signs that an improvement has begun in the Euro Area, although the recovery is expected to take several years. In the United States, too, the prospects for a continuing recovery are good, while emerging markets are slowing down after several years of very high growth.
Inflation is currently low and CPIF inflation is expected to remain at just over 1 per cent in the near term. When economic activity improves, import prices and wages will rise at a faster rate, at the same time as companies are able to raise their prices more. This means that inflation is expected to attain 2 percent in 2015.
The repo rate needs to remain low to support the economic upturn and contribute to inflation rising towards 2 percent. The Executive Board of the Riksbank has therefore decided to hold the repo rate unchanged at 1 percent. The repo rate needs to remain at the current low level until economic activity is showing a clearer improvement and inflation has risen for a while. As before, the repo rate is not expected to be raised until the end of 2014.