Riksbank Faces Rate Dilemma Amid Inflation Spike

Sweden’s central bank faces a tough choice this week between cutting borrowing costs to fire up a stalling economy and holding them steady to counter faster inflation.

Economists are almost evenly split on the outcome of its decision, due to be announced on Tuesday. Thirteen out of 22 forecasts compiled by Bloomberg anticipate no change in the Riksbank’s interest rate at 2%, while the rest expect a quarter-point reduction.