Per Jansson: Strong reasons to expect inflation to fall back
Presentation “In a turbulent world, central banks must be as predictable as possible and not contribute to further uncertainty. I believe this is best done by having a clear focus on maintaining confidence in the inflation target. Temporary deviations from the target can be seen through, but great care must be taken to ensure that such deviations do not become more permanent and thus the spark that triggers a more general inflationary process.” These comments were made by Deputy Governor Per Jansson, when he spoke today about the Riksbank’s latest policy rate decision at Nordea in London.
Date: 01/04/2025 09:00
Speaker: Deputy Governor Per Jansson
Place: Nordea, London
Per Jansson, deputy governor.
“Inflation has risen recently and in our forecast we expect it to be slightly elevated for the rest of this year. This applies in particular if energy prices are excluded. But there are strong reasons to believe that the increase will not be persistent. The unusually large contribution from the so-called basket effect is expected to fall out next year. In addition, world market prices for several commodities have fallen back and the krona has strengthened, which should slow the pace of food price increases going forward.”
It is well established that monetary policy should see through temporary variations in inflation, both upwards and downwards, said Mr Jansson.
“But in the current situation, I believe it is particularly important not to create unnecessary expectations that interest rate increases are imminent, not least because the Swedish economy still needs support. It is only if confidence in the inflation target starts to be threatened that I think such expectations are justified. But if such a situation were to arise, which, as I have said, I do not consider likely at present, we should act quickly and decisively in monetary policy.”