Inflation

Inflation in February 2026: KPIF drops to 1.7 percent

KPIF inflation continues to decline, landing at 1.7 percent in February 2026, below the Riksbank's target. KPI inflation remains low at 0.5 percent. This development affects both household purchasing power and future interest rate prospects.

Monthly figures

In February 2026, KPIF inflation amounted to 1.7 percent, a decrease from 2.0 percent in January. Consequently, KPIF is now below the Riksbank's inflation target of 2 percent. KPI inflation remains low, recorded at 0.5 percent. The difference between KPIF and KPI primarily reflects the effect of interest rate changes, where KPI is directly influenced by household housing costs.

What does the outcome mean?

Low inflation implies weak price pressure in the economy, which benefits household purchasing power and can make it easier for companies to plan their costs. At the same time, the risk of prices continuing to rise rapidly decreases. On a broader level, continued low inflationary pressure can also affect the Riksbank's interest rate policy, as the need for high policy rates diminishes when inflation is below the target.

Mortgage examples and personal loans

With a repo rate of 1.75 percent, this forms the basis for banks' mortgage rates, which are often set with a markup. For a mortgage of 1, 3, or 5 million SEK and an assumed markup of 1 percentage point, the interest cost will be higher than the repo rate. Households' total monthly cost is also affected by amortization. For personal loans, the markup is often larger, around 2.5 percentage points above the policy rate, resulting in a significantly higher interest cost compared to mortgages.

History and trends

Over the last 24 months, KPIF inflation has varied significantly, with peaks of over 3 percent in the autumn of 2025. Since then, inflation has steadily declined, and for the last two months, KPIF has been below the inflation target. KPI has been even lower during the same period, clearly showing the effect of falling interest costs in the household sector.

Forecast and outlook

With KPIF inflation below the target and weak price pressure, conditions are favorable for inflation to remain at low levels, provided no major cost increases occur for energy or food. In this situation, the Riksbank may need to weigh stimulating the economy against securing the inflation target, but recent developments reduce the pressure for further interest rate hikes.

Frequently asked questions about inflation

• What is the difference between KPI and KPIF?
  KPI includes interest costs for housing, while KPIF excludes these and provides a picture of inflation without the direct effects of interest rate changes.
• Why does the Riksbank use KPIF as its target variable?
  KPIF provides a more stable picture of the underlying price pressure in the economy, as it is not directly affected by changes in the policy rate.
• How are mortgage rates affected by inflation?
  If inflation is low, the pressure on the Riksbank to raise the policy rate decreases, which often leads to lower mortgage rates for households.
• What drives inflation in Sweden?
  Inflation is influenced by factors such as energy prices, food costs, wages, and international factors.
• How quickly can inflation return to the target?
  This depends on several factors, including price developments for energy and food, as well as the Riksbank's monetary policy and the general economic climate.