STOCKHOLM: Headline inflation hit its highest level in more than three decades in March as the war in Ukraine pushed up food and fuel prices, data showed on Thursday.
Consumer prices in Sweden, measured with a fixed interest rate, rose 1.7 percent in March from the previous month and were up 6.1 percent from the same month last year, the statistics office (SCB) said on Thursday.
The headline figure was the highest since December 1991 while inflation, excluding volatile energy prices, at 4.1%, matched a figure from December 1993.
The central bank targets 2% headline inflation.
Prices have soared in recent months as the Ukraine conflict worsens bottlenecks and transport problems left over from the COVID 19 pandemic.
At its most recent meeting in February, a divided Riksbank had forecast it would keep rates at the current 0% until the second half of 2024.
But several rate-setters have said that is unrealistic now.
Other central banks, like the Federal Reserve in the United States and the Bank of England have already started hiking rates.
Markets - which have been more hawkish on rates than the Riksbank over the last year - now see a series of rate hikes starting in September this year, if not sooner.
The central bank is likely to take a hawkish turn on April 28, when it announces its next policy decision, but uncertainty about the effects of the war in Ukraine on the economy may make it cautious in forecasting a rapid tightening of policy.
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