Inflation

Inflation rises to 2.8 percent – What does it mean for Swedish households?

The latest inflation report from SCB shows that inflation according to KPIF (Consumer Price Index with fixed interest) has now increased to 2.8 percent for June 2025. This indicates a clear rise from May when KPIF was at 2.3 percent. At the same time, CPI (the regular consumer price index) is reported at 0.7 percent, which remains a low level compared to previous years. With these figures in mind, questions are raised about how the Riksbank's decisions and the economic development will affect interest rates, food prices, and household finances moving forward.

Quick analysis: Inflation trends and economic forecasts

After a period of declining inflation in 2024, where KPIF even fell below the Riksbank’s target of 2 percent for several months, we now see a recovery in inflation rates. Since the turn of the year, KPIF has moved from 2.2 percent in January to 2.8 percent in June, with a temporary peak at 2.9 percent in February. CPI, however, has remained significantly lower, largely due to falling mortgage rates and lower energy prices, which influence CPI more than KPIF.

KPIF and CPI – What’s the difference and why does it matter?

KPIF excludes the effects of interest rate changes, making it the Riksbank’s most important measure for assessing underlying inflation. CPI, on the other hand, is directly affected by interest rate adjustments and is therefore more volatile. The fact that KPIF is now above the inflation target of 2 percent signals that inflationary pressures are increasing again, even if CPI shows a more subdued picture of price development.

The Riksbank’s decision – What happens to interest rates?

During spring and summer 2025, the Riksbank has lowered the repo rate from 2.5 percent in January to the current 2 percent. This reduction has been possible thanks to the earlier decline in inflation. Now that KPIF is rising again, pressure increases on the Riksbank to wait with further rate cuts or even signal a pause.

Historically, the Riksbank has been clear that inflation should stay close to 2 percent. With KPIF now clearly exceeding the target, banks may become more cautious about lowering their lending rates. At the same time, CPI remains low, suggesting that households’ actual cost increases are limited – but the risk is that this could change rapidly if inflationary pressures persist.

Mortgage calculation: How does today’s interest rate environment affect your loan?

With the repo rate at 2 percent and a typical bank margin of 1 percent (total 3 percent mortgage rate), the calculation for a 30-year annuity loan looks like this:

• 1 million SEK: approx. 4,216 SEK/month
• 3 million SEK: approx. 12,648 SEK/month
• 5 million SEK: approx. 21,080 SEK/month

(Note that this is a simplified calculation and actual interest rates and amortization requirements may vary between banks.)

For personal loans (unsecured loans), interest rates are often higher, in the range of 6–10 percent, which results in significantly higher monthly costs. For example, a 100,000 SEK personal loan at 8 percent interest with a 10-year repayment period costs around 1,200 SEK per month.

Food prices, fuel, and energy – What can we expect?

Inflation affects household daily life in several ways. During spring and summer, food prices have shown signs of stabilizing, but with increased inflationary pressures, we may see higher food prices again in the future. Fuel prices have been relatively stable, but if inflation continues to rise, these could also be affected, especially if global oil prices increase.

Energy prices, which have been a major concern during previous inflation periods, have so far been contained thanks to good supply and milder weather. However, if inflation persists, there is a risk that electricity prices will rise again, especially heading into autumn and winter when demand increases.

Economic forecasts – What do the experts say?

Many economists believe that the current inflation increase may be temporary, but it is important to monitor the coming months. If KPIF continues to rise, the Riksbank may be forced to pause or even raise interest rates again, which would negatively impact mortgage rates and household finances.

At the same time, the labor market and the global economy remain uncertain, making it likely that the Riksbank will act cautiously. Households should therefore expect interest rates to remain at current levels during the fall, but quick changes could occur if inflation accelerates further.

Summary: Keep an eye on inflation – and your finances

The latest inflation report shows that inflation is on the rise again, which could have significant consequences for Swedish households. Interest rates are likely to stay steady or even increase if inflation persists, and prices for food, fuel, and energy may be affected negatively. It’s wise to review your finances, especially if you have large loans or plan major new purchases.

We will follow developments and return with more analyses as new figures are released.