Inflation

Inflation at Low Levels: What Does It Mean for Household Economies?

According to the latest figures from Statistics Sweden (SCB), inflation measured by the CPI remained at 0.5 percent in February 2026 compared to the same month a year earlier. This means that price increases for most goods and services have been very small over the past year. For many households, this implies that purchasing power is more stable than during periods of higher inflation.

How CPI and CPIF Differ

CPI (Consumer Price Index) measures the average price development of everything households consume, including the effect of changing interest rates on mortgages. CPIF (Consumer Price Index with Fixed Interest Rates) shows the same price development but excludes the effect of interest rate changes. The Riksbank often uses CPIF as a benchmark for its inflation target, as it provides a picture of price development without being influenced by changes in households' interest costs.

In February, CPIF fell to 1.7 percent from 2.0 percent the previous month. This means that even though general inflation is low, the perceived inflation for households with mortgages remains somewhat higher. The fact that CPIF is now declining suggests that pressure from interest costs is easing, but the level is still above CPI.

What Does Low Inflation Mean for Everyday Economics?

The fact that inflation according to CPI is at 0.5 percent means that prices for groceries and services have only increased marginally over the past year. For most households, this means that money goes further for recurring expenses, assuming incomes remain unchanged. It can also make it easier to plan purchases and major economic decisions when the price level is stable.

At the same time, it is important to remember that households with mortgages may still experience higher living costs due to interest expenses, which is reflected in CPIF being higher than CPI. Since CPIF is also declining, this could be a sign that pressure from interest costs is beginning to ease somewhat, but the difference between CPI and CPIF shows that interest rates continue to affect household economies.

Things to Consider Regarding Savings and Loans

• Low inflation means that saved money loses less value over time, which can benefit those who have a buffer in their account or are saving for larger purchases.
• Since inflation is well below the Riksbank's target of 2 percent (measured in CPIF), it could influence the discussion on future monetary policy. However, exactly how and when any changes might occur remains uncertain.
• For those with mortgages, it may be time to review their interest terms and consider whether there is an opportunity to renegotiate or fix the interest rate, especially if the trend of declining CPIF continues.
• Major economic decisions, such as buying a car or a property, are also affected by low inflation and more stable interest rates. It can be easier to calculate future costs when the price level is predictable.

Continuing to Monitor the Development

Since inflation is now below the Riksbank's target, many are following how monetary policy might develop. If the trend of low inflation persists, it could affect both interest rates and households' economic conditions in the future, but it is difficult to say exactly how quickly changes can occur. For households, it may be wise to stay updated on the development, especially if facing major economic decisions or having loans with variable interest rates.