1. Monetary Policy Report 2008:2

2. The repo rate is raised to 4.5 per cent
The repo rate needs to be raised further during the course of the year
To meet the inflation target of two per cent

3. Repo rate raised and interest rate path adjusted upwards
Inflation is increasing more rapidly than expected
Large increase in the oil price and remaining at a high level
Inflation expectations too high

4. Monetary policy deliberations
Financial turbulence
Dampened growth in Sweden and abroad
Inflation above the target
The oil price
Inflation expectations

5. Note. Broken lines refer to the Riksbank’s forecasts
Repo rate raised and interest rate path adjusted upwards Per cent, quarterly average
MPR 2008:2
MPU April 2008
Note. Broken lines refer to the Riksbank’s forecasts
Source: The Riksbank

6. Inflation increasing more rapidly than expected CPI, annual percentage change
MPR 2008:2
MPU April 2008
Note. Broken lines refer to the Riksbank’s forecasts
Sources: Statistics Sweden and the Riksbank

7. Source: Intercontinental Exchange and the Riksbank
Substantial increase in the oil price and continued high level USD per barrel
Oil price, outcome
Futures, average up to 16 January 2008 (MPR 2008:1)
Futures, average up to 11 April 2008 (MPU 2008:1)
Futures, average up to 18 June 2008 (MPR 2008:2)
Source: Intercontinental Exchange and the Riksbank

8. Source: Prospera Research AB
Inflation expectations too high Different groups’ inflation expectations two years ahead Annual percentage change
Purchasing managers’ index
Social partners
Money market participants
Source: Prospera Research AB

9. Sources: Reuters Ecowin and the Riksbank
Continuing financial turmoil Difference between interbank rates and expected policy rates, basis points
Sweden
Euro area
USA
United Kingdom
Note. The difference is calculated as the difference between the 3-month interbank
Rate and the 3-month overnight index swap.
Sources: Reuters Ecowin and the Riksbank

10. Households are more pessimistic Confidence indicators for households, net figures
Sweden (left scale)
Euro area (left scale)
USA (right scale)
Sources: European Commisssion, Conference Board and National Institute of Economic Research

11. Weaker GDP growth in Sweden Quarterly change in per cent, calculated at an annual rate, seasonally-adjusted data
GDP according to NA 2007:3
Forecast, MPR 2008:1
GDP according to NA 2007:4
Forecast, April 2008
GDP according to NA 2008:1
Forecast, MPR 2008:2
Note. Broken lines refer to the Riksbank’s forecasts
Sources: Statistics Sweden and the Riksbank

12. Note. Broken lines refer to the Riksbank’s forecasts
Employment has increased strongly Thousands of persons, seasonally-adjusted data
Note. Broken lines refer to the Riksbank’s forecasts
Sources: Statistics Sweden and the Riksbank

13. Risks in the interest rate forecast
+ Higher inflation and lower growth
- Falling commodity prices
- Financial turmoil

14. Repo rate Per cent
Source: the Riksbank

15. Repo rate a forecast -not a promise Per cent, quarterly average
90%
75%
50%
Repo rate
Note. Broken lines refer to the Riksbank’s forecasts
Source: The Riksbank

16. Nominal and real repo rates Per cent
Forecast, real repo rate, MPR08:2
Forecast, real repo rate, MPU08:1
Nominal repo rate
Forecast, nominal repo rate, MPR08:2
Forecast, nominal repo rate, MPU08:1
Sources: National Institute of Economic Research, Prospera Research AB and the Riksbank