Monetary%20policy%20decision%208%20October%202008

1
Monetary policy decision8 October 2008
2
The financial crisis may worsen

• Reinforces the ongoing economic downturn
• Resulting in lower inflationary pressures

3
Repo rate cut by 0.5 percentage points

• Alleviates the consequences of the financial
  crisis
• Inflationary pressures beginning to decline
• Credit crunch over and above the repo rate
• Joint action reinforces confidence

4
Spreads continuing to rise
Note. Basis spread Interbank rate expected
policy rate (STINA-rate), 3 months, basis points
5
Tightening in short-term mortgage rates over and
above the effects of monetary policy
Note. The difference beween variable mortgage
rates and expected policy rate (STINA rate),
percentage points
6
Weakening of Swedish krona
Note. TCW index, 18 November 1992100
7
GDP and employment forecasts

• General economic slowdown
• Financial crisis
• Exchange rate
• Oil and commodity prices
• ..probably need to be revised down

8
Purchasing managers index at lowest level since
start in 1994
Note. Manufacturing industry, seasonally-adjusted
index and net figures
9
Clearer signs of weakening in the labour market
Probably high in September
Note. 1000s, seasonally-adjusted data
10
Inflation forecast

• Weaker economic activity
• Oil and commodity prices
• Exchange rate
• .will probably be revised down

11
Lower oil prices(Brent, in USD)
12
The Economist commodity price index (in USD)
13
Repo rate cut by 0.5 percentage points

• Alleviates consequences of the financial crisis
• Inflationary pressures beginning to decline
• Credit crunch over and above the repo rate
• Joint action reinforces confidence