Inflation

Inflation Remained at 0.5 Percent in February – What Does This Mean for Households?

February 2026 saw continued low inflation according to the latest figures from Statistics Sweden (SCB). The Consumer Price Index (CPI) showed an annual rate of 0.5 percent, unchanged from January. At the same time, the CPIF, which measures inflation excluding the effects of interest rate changes, fell to 1.7 percent from 2.0 percent the previous month. The monthly change in CPI was 0.6 percent.

What Does Low Inflation Mean for Household Finances?

An inflation rate of 0.5 percent means that prices for goods and services are rising very slowly. This gives households increased purchasing power because wages and benefits are not eroded by price increases at the same pace as before. A stable price level also makes it easier to plan larger purchases, such as a home or a car, without worrying about sudden price hikes in the near future.

It is important to distinguish between low inflation and falling prices (deflation). Low inflation means that prices are still rising, albeit slowly. Deflation means that prices are actually falling, which can create other economic challenges such as reduced consumption and investment.

Why Is CPIF Important for the Interest Rate Environment?

CPIF, which now stands at 1.7 percent, is often used by the Riksbank as a benchmark for monetary policy. The target is 2 percent. When CPIF is below the target, the likelihood of interest rate cuts increases, but since 1.7 percent is still close to the target, it is not certain that the Riksbank will act immediately. The interest rate level affects both mortgage costs and the returns on savings accounts.

How Can Households Think About Purchasing Power, Interest Rates, and Savings Now?

• Purchasing Power: Low inflation means that wages go further. It may be a good time to review consumption plans and larger purchases since the risk of rapid price increases is small.
• Mortgages: CPIF is approaching the target, which increases expectations of interest rate cuts in the future. However, interest rate changes may take time, especially if inflation turns upward again. Those planning to fix their interest rate should consider that the variable rate may fall during the year.
• Savings: Low interest rates on savings accounts continue to yield low returns, but saved money does not lose value as quickly when inflation is low. Those who want to protect their capital against inflation do not need to take as many risks as during periods of high inflation.
• Major Economic Decisions: Stable price development reduces uncertainty when buying a home, a car, or making other major investments. There is less risk of prices skyrocketing quickly.

Things to Consider Regarding the Inflation Figures

• CPI (0.5 percent) shows the total rate of price increase including interest costs, while CPIF (1.7 percent) excludes the effect of changing interest rates. CPIF is more relevant for interest rate forecasts.
• Inflation is low, but prices are still rising slightly. This is not a case of falling prices in the economy as a whole.
• Figures from a single month do not tell the whole story. The Riksbank looks at the trend over several months before making decisions on the policy rate.