Swedish central bank says fiscal policy, wages important for path ahead

© Reuters. FILE PHOTO: The sign for Sweden’s central bank is pictured in Stockholm, Sweden, August 12, 2016. Picture taken August 12, 2016. REUTERS/Violette Goarant

STOCKHOLM (Reuters) – How much Sweden’s central bank has to raise rates depends in part on wage negotiations and fiscal policy responses to the current inflation crisis, Deputy Governor Per Jansson said in regular testimony to parliament’s finance committee on Thursday.

“The best scenario would be if we can return inflation to the target with relatively cautious rate increases,” he said in a statement released in conjunction with the hearing.

“But a lot also depends on the support for this development in price-setting and wage formation and the formulation of fiscal policy.”