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Eurozone fears prompt Swedish rate cut

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Eurozone fears prompt Swedish rate cut

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The eurozone’s problems have caused Sweden to cut its main interest rate by a quarter of a percent to one and a quarter percent.

The central bank said it expects to keep it at that level next year.

It blamed “considerable uncertainty regarding the eurozone’s public-finance problems”.

More than half of Sweden’s exports go to the eurozone and it has already see a fall in orders from the region.

At the same time as the rate decision was announced the Riksbank forecast Sweden’s gross domestic product would grow by 1.3 per cent next year. That is slightly lower than its earlier forecast.