STOCKHOLM (Reuters) – Swedish central bank Deputy Governor Per Jansson weighed the need for a bigger hike than the half-percentage point raise adopted by rate-setters at the Riksbank’s most recent meeting in April, he said on Friday.
“We had a very big miss when it comes to our forecast (in February) … if you look at that picture, then both 25 and 50 basis points looked to be insufficient,” Jansson said.
“But all things considered, there were a number of glimmers of light … that meant that I could back a hike by 50 basis points.”
The central bank said then that it expected to hike by a further quarter point in either June or September with the policy rate then to remain unchanged going forward.
However, Jansson, who has appeared the probably most hawkish member of the Riksbank’s board in recent months, said he was willing to rethink the rate path if inflation did not start to come down rapidly.
“We haven’t got all that long before 2024 comes around and inflation needs to be back down somewhere around the target,” he said.
“If I think we are losing our way on that path … I am ready to think again about monetary policy.”
At the most recent meeting, two of the five members of the rate-setting board voted for a quarter point cut to give more flexibility later in the year.
All the rate-setters agreed, however, that the Riksbank might need to think again if inflation proves stickier than currently expected.
(Reporting by Simon Johnson; editing by Niklas Pollard)
