Skip to main content

Sweden raised rates.

 


The Riksbank raised rates by 0.75 percentage points to 2.5 per cent, the highest level since 2008, and hinted that further increases were likely. «It's a fact that we have a 2 per cent inflation target, which is 9 per cent. So it's essential to get back to 2 per cent, and we think that everyone will be better off if we get there sooner rather than later,» Ingves said. According to October's figures from the Value-guard index, Swedish house prices have fallen 14 per cent since their March peak.

Ingves said the peak-to-trough fall should be about 20 per cent and that it should be «manageable», as prices had risen dramatically before this year. The central bank expects the economy to contract by 1 per cent next year, a change from its previous forecast of minus 0.5 per cent growth. The Riksbank was one of the last major central banks to lift its interest rate above zero, only in May this year, prompting accusations that it was not responding appropriately. In 2010 and 2011, the Riksbank and the European Central Bank raised rates after the financial crisis, only to cut them again not long afterwards.

Paul Krugman, a former Nobel economics prizewinner, said at the time that the central bank's position was «possibly the most gratuitous» policy error of the crisis, calling it «sadomonetarist». The Riksbank hit the headlines again in 2015 when it became one of the first central banks to introduce negative rates and kept them there until the end of 2019, when its primary rate went to zero, as Ingves worried about inflation is far below the central bank's targets. In yesterday's monetary policy report, the central bank suggested rates were likely to rise to just below 3 per cent early next year.

www.sba.tax

Labels:

Comments

Post a Comment

Cloud Bookkeeping

H&M struggles with profitability.

  H&M blamed high clothes prices ,  its exit from Rus­sia and a cost-cut­ting pro­gramme for an unex­pec­tedly large col­lapse in its earn­ings as the world’s second-largest fash­ion retailer’s struggles with prof­it­ab­il­ity con­tinue .  Oper­at­ing profit plunged 87 per cent to SKr820mn in the fourth quarter to the end of Novem­ber from a year earlier .  Shares in H&M fell more than 4 per cent to SKr125 . 80 yes­ter­day ,  hav­ing lost nearly half of their value since their recent peak in April 2021 .  The Swedish retailer ,  which lags behind Indi­tex ,  the Span­ish owner of Zara ,  in sales and prof­it­ab­il­ity ,  launched a SKr2bn cost-cut­ting pro­gramme last year that included 1 , 500 job losses . H&M’s sales in the fourth quarter were up 10 per cent to SKr64 . 4bn but flat in local cur­rency terms .  It said sales from Decem­ber 1 to Janu­ary 25 had increased 5 per cent in local cur­ren­cies .  «Sales in ...
2 comments
Read more

Commercial properties continue to fall

  UK commercial property values and rents are projected to «tumble off a cliff edge» in the first quarter of 2023, as estate agents warn offices will fare worst as prices fall. A survey of more than 400 commercial agents forecast a 2.9 per cent decrease in prices per square foot across the industry in the first three months of the year, with offices falling 3.1 per cent. «Where we saw the market stop still, we will see the market finding its level, people working out where things are, where value is,» he said. Listed vehicles have already seen this valuation drop in their share prices, with real estates investment trusts such as Land Securities and British Land falling by a fifth or more this year. According to the RIB estate report, offices are expected to suffer the most significant sales price falls, with nearly a third of respondents expecting them to come down by more than 5 per cent. In addition, the survey projected a 1.3 per cent fall in rents per square foot over the perio...
Post a Comment
Read more

BoE is considering to increase deposit guarantee.

  According to anonymous sources, the Bank of England is considering reforming its deposit guarantee scheme. The move comes in response to concerns that the current system may not be sufficient to protect customers in case of a bank failure. The Financial Services Compensation Scheme guarantees deposits up to £85,000 per person per institution. However, some experts have raised concerns that this may not be enough to prevent a run on banks in a significant financial crisis. As a result, the Bank of England is reportedly considering several options for reforming the scheme, including increasing protection and introducing more stringent bank regulations. A final decision on any changes will be made later this year. One option the Bank of England considers is increasing the protection offered by the deposit guarantee scheme. This could involve raising the maximum amount guaranteed per person or extending coverage to more types of deposits. Another possibility is to introduce more stri...
Post a Comment
Read more