Inflation

Inflation Remains Low – How It Affects Household Finances

The latest figures from Statistics Sweden (SCB) show that inflation, according to the CPI, reached 0.5 percent in February 2026, a marginal increase compared to January when inflation was 0.4 percent. This means that price increases in society remain moderate compared to previous years. At the same time, the CPIF, which is the measure the Riksbank uses to guide monetary policy, fell to 1.7 percent from 2.0 percent in January. Prices rose by 0.6 percent between January and February, but at a calmer pace than in recent years.

Why Does Low Inflation Matter?

An inflation rate of 0.5 percent is well below the Riksbank's target of 2 percent. This means that households' money retains its value better than during periods of higher inflation. For many, this could mean that wage increases and incomes go further, making it easier to plan finances without having to account for rapid price hikes on everyday goods and services.

At the same time, the declining CPIF value could affect expectations regarding the Riksbank's future interest rate decisions. If the policy rate is lowered, this could in turn affect both interest costs on loans and returns on savings.

How Can Households Think About the New Inflation Environment?

• Purchasing Power is Affected: When inflation is low, households do not need to compensate for price increases in the same way as before. This can create more room in the wallet, especially if incomes grow faster than prices.
• Interest Rates May Be Affected: Since the CPIF is now further below the inflation target, expectations are rising that the Riksbank may lower the policy rate. If this happens, households with variable-rate mortgages could see lower interest costs in the future, though it remains uncertain when and how quickly a rate cut would occur.
• Savings and Returns: Low inflation can mean lower interest rates on savings accounts and other interest-bearing investments. At the same time, the risk of savings rapidly losing value due to rising prices decreases.
• Continued Price Increases – But at a Calmer Pace: Prices increased by 0.6 percent from January to February, but it is important to view this in a longer-term perspective. Annual inflation remains low, indicating that price development is significantly more stable than in recent years.

Uncertainty and What to Keep an Eye On

• CPI and CPIF are two different measures: CPI shows general price development, while CPIF excludes the effects of changed mortgage rates and is the measure the Riksbank uses for interest rate decisions.
• Low inflation does not mean prices are falling, but rather that they are rising slowly. It is not deflation, but the low level can create uncertainty regarding future economic decisions and monetary policy.
• The monthly price increase can be higher than the annual inflation rate, which can create a misleading picture if one only looks at a single month. The long-term trend is the most relevant factor for household finances.

What Does This Mean for Major Economic Decisions?

The current inflation level can provide households with better conditions for planning their finances. It may be an opportunity to review your budget, savings, and any existing loans. Since the interest rate environment may change in the future, it is good to stay updated on both inflation and the Riksbank's announcements, while simultaneously avoiding hasty decisions. Low inflation means money goes further, but it remains important to follow developments to be able to adapt if conditions change.