Swedish Confidence Declines on Concern Over Economic Slowdown

(Bloomberg) -- Swedes became more pessimistic as the central bank prepares to raise interest rates for the first time in seven years and politicians struggle to form a government more than a month after the nation’s inconclusive election.

The economic tendency indicator fell to 108.0 in October from 111.2 in September, the National Institute of Economic Research said. Analysts surveyed by Bloomberg had expected a reading of 111.0. A reading above 100 indicates a stronger than normal economy, while values below show its weaker than normal. It has been above 100 since the middle of 2015.

Manufacturing confidence rose/fell to 115.4 from 117.3 in September (analysts had estimated 117.0), while consumer confidence declined to 99.5 from 103.5 (analysts had predicted 103.3).

Sweden’s economy is in the longest uninterrupted expansion in nearly 40 years, stoked by record low interest rates and global demand form its exports. The central bank this week reiterated that it plans to raise interest rates either in December or February as inflation pressures rise. Inflation reached the highest level since 2008 last month, paving the way for the Riksbank’s first rate increase since 2011.

The reading also comes amid gridlock in parliament. The country is without a government more than a month after an inconclusive election in early September with little hope for a solution soon. The election result left both established political blocs without a majority.

©2018 Bloomberg L.P.