While the Riksbank, the Norges Bank and the ECB are likely to keep interest rates unchanged next week, we expect them all to signal tighter policy ahead. The recent rebound in underlying inflation will have made the Riksbank more confident in its plans to start raising rates and we think that next week it will signal a December move more clearly. Meanwhile, after raising rates by 25bp in September, continued strong inflation will see the Norges Bank signal that rates will rise further next year. And the ECB will also stick to its guidance that rates will be on hold “through the summer” of 2019. By contrast, weak inflation in Switzerland and worries about the franc appreciation mean that the SNB won’t even hint at raising interest rates any time soon.
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