Danske Bank anticipates that the Riksbank will lower interest rates by 25 basis points to 1.75% in November, citing improved inflation prospects. The bank also revises its 2025 growth forecast down to 1.1% and highlights significant uncertainty for 2026 due to high inflation and a weak job market.
Danske Bank Predicts Riksbank Rate Cut in November
Danske Bank Predicts Riksbank Rate Cut in November
Danske Bank expects the Riksbank to cut interest rates once more this year.
In November, Danske Bank believes that inflation prospects will have improved and therefore expects the Riksbank to lower the interest rate by 25 basis points to 1.75%.
In its economic report, Danske Bank warns that 2025 risks becoming "another lost growth year." The bank has revised its growth forecast for the year down to 1.1%. In the latest forecast from June, the bank expected a growth of 1.6%.
"The uncertainty for 2026 is significant, especially considering unexpectedly high inflation outcomes and a continued weak labor market," says Chief Economist Susanne Spector in a comment and continues:
"The slow recovery also raises the question of whether the current interest rate level is more restrictive than the Riksbank previously assessed."
The unemployment forecast remains at 8.7% for the full year. However, Danske Bank now expects slightly higher unemployment next year, 8.4% compared to 8.2% in the June forecast.