In a surprise move, Sweden’s central bank has cut interest rates to zero.<br /><br />The bank said that was to counter the risk of prolonged deflation and it does not plan to raise rates until at least the middle of 2016. <br /><br />As in the eurozone, prices have been falling in Sweden encouraging consumers to delay purchases, which weakens economic growth. <br /><br />The bank did say “the Swedish economy is relatively strong and economic activity is continuing to improve”. <br /><br />It expects an expansion of 1.9 percent this year, against 1.7 percent previously, and 2.7 percent in 2015, versus a previous forecast of 3.0 percent.<br /><br />It has cut rates steadily from a peak of 2.0 percent at the end of 2011 as the weak eurozone economy hit Sweden’s key export sector.<br /><br />The central bank’s dovish message sent the Swedish crown to a four-year low against the dollar and to a four-month low against the euro.<br /><br />with Reuters
