Riksbank’s resolve to be tested next year

The recent downward revisions to Sweden’s unemployment rate will no doubt be interpreted by the Riksbank as justification for its plan to raise the repo rate out of negative territory in December. But if our forecast for the economy to weaken next year proves accurate, we think that policymakers will have no choice but to reverse course. Meanwhile, data released next week are likely to show that annual growth in Swiss industrial production slowed in Q3.