signs that they have improved recently. However, growth has been weak for a long time, and the timing of the expected recovery has been gradually pushed back. The turnaround in the labor market also appears to be taking longer than expected,” the Riksbank said. However, Deputy Governor Anna Seim entered a reservation against the decision to cut the policy rate and instead advocated an unchanged policy rate, together with a policy rate path signalling some probability of a further cut later this year. She argued that a vulnerable supply side, combined with an expansionary fiscal policy in 2026, implies that inflation could surprise on the upside. The Riksbank cut interest rates to 1.75% as the Swedish economy remains weak. While markets expect no further rate cuts ahead, as signaled by the central bank, analysts are divided on the next move for interest rates. Despite elevated inflation, the Riksbank sees price pressures as transitory and expects inflation to continue falling.