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Sweden ups interest rates to counter inflation

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Sweden ups interest rates to counter inflation

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Sweden raised its benchmark interest rate from 1.5 percent to 1.75 percent.

It is the sixth increase in a row as the Swedish central bank moves to cap inflation in Europe’s fastest growing economy.

The bank, which has also spoken of the need to cool rapidly rising property prices to avoid a housing bubble, said it expected underlying inflation to increase as economic activity strengthened.

Analysts expect another rate rise at the bank policymaker’s next meeting in July.

Sweden’s economy grew 7.3 percent year-on-year in the fourth quarter of 2010 and its inflation rate hit 2.9 percent in March.