Inflation

Inflation July 2025: KPIF rises to 3 percent

Inflation according to KPIF increased to 3 percent in July 2025, up from 2.8 percent the previous month. This indicates that inflation is now clearly above the Riksbank's target of 2 percent. The CPI inflation remains lower, measured at 0.8 percent for July.

Monthly figures

KPIF stood at 3 percent in July 2025, compared to 2.8 percent in June. This marks a clear increase and means that the inflation rate is now once again higher than the Riksbank's target. During the same period, CPI, the traditional measure of consumer price development, was 0.8 percent. The difference between KPIF and CPI mainly depends on the fact that KPIF excludes the direct effects of changes in mortgage rates, providing a better picture of the underlying price pressure.

What does the outcome mean?

That inflation according to KPIF is now increasing and exceeding the 2-percent target means that households' purchasing power continues to be pressured by rising prices. For companies, it implies ongoing price pressures, which could lead to higher costs and possibly new price increases for consumers. The rising inflation may also influence interest rate levels in the future, as the Riksbank needs to balance between the inflation target and households' economic situation.

Mortgage example and personal loans

With a repo rate of 2 percent, a typical mortgage involves an interest rate premium of about 1 percentage point. For a loan of 1 million SEK, the interest cost is approximately 2,500 SEK per month; for 3 million SEK, about 7,500 SEK; and for 5 million SEK, around 12,500 SEK (before amortization and tax). Amortization adds to and affects the household's total monthly cost. For personal loans, the interest premium is often higher, around 2.5 percentage points over the repo rate, resulting in significantly higher monthly costs compared to mortgages.

History and trends

Over the past year, KPIF inflation has fluctuated considerably. After a period with inflation near or below the target during the second half of 2024, the pace increased during spring and summer 2025. KPIF was as low as 1.5 percent in December 2024 but has since risen gradually to the current level. Meanwhile, CPI has developed more weakly, clearly illustrating the effect of falling mortgage rates on the traditional inflation measure.

Prognosis and outlook

The recent rise in KPIF indicates that inflationary pressures are once again noticeable. If price increases in energy or food continue, inflation could become entrenched above the target. The Riksbank faces a balancing act between controlling inflation and not further burdening households and companies through interest rate hikes. The continued development largely depends on how quickly price pressures can be dampened during the autumn.

Frequently asked questions about inflation

• What is the difference between KPI and KPIF?
  KPI measures the total price development for household consumption, while KPIF excludes the effects of changes in mortgage rates, thus providing a clearer picture of underlying price pressures.
• Why does the Riksbank mainly use KPIF?
  KPIF provides a more accurate picture of inflation because it is not directly affected by interest rate changes, making it better for monetary policy decisions.
• How do inflation rates affect mortgage interest rates?
  High inflation can lead to higher policy rates, which in turn cause mortgage rates to rise, increasing households' interest costs.
• What is currently driving inflation?
  Inflation is primarily influenced by price developments in energy, food, and services, as well as changes in demand and production costs.
• How quickly can inflation return to the target?
  It depends on several factors, including how fast price increases are dampened and how the Riksbank acts with interest rates.