Swedish c.bank keeps policy rate on hold, may raise next year

The Riksbank forecast rates would be at the current level -or higher - through next year, but markets are pointing to an about-turn sooner than that as the economic slowdown starts to bite. The Riksbank publishes its next rate decision on Feb. 1 next year.

Sweden's central bank kept its policy rate on hold at 4.00% on Thursday but said it was prepared to raise the policy rate further if inflation prospects deteriorate.

"The forecast for the policy rate is that it may be raised further at the start of next year and that monetary policy needs to be contractionary for a relatively long period of time," the central bank said in a statement. Analysts had been split

ahead of the decision with 10 of 19 picking a hike and nine expecting no change.

Most believe rates have now peaked and attention will switch to when the central bank will start to ease policy again. The Riksbank forecast rates would be at the current level -or higher - through next year, but markets are pointing to an about-turn sooner than that as the economic slowdown starts to bite.

The Riksbank publishes its next rate decision on Feb. 1 next year.