Handelsbanken: Double trouble for households
The economic climate in Sweden seems stable at the moment, with employment on the rise and order books full. However, storm clouds are gathering. Households are starting to feel the pinch of higher prices and rising interest rates as the Swedish central bank (Riksbank) focuses on fighting inflation. Unemployment looks set to rise in the not too distant future. Sweden has the policy muscle to step in if households come under too much pressure, but striking the right balance is no easy feat. Fiscal policy that proves too expansionary would further fuel inflation, counteracting the Riksbank’s