Swedish central bank seen cutting rates, more to come in 2025
Analysts unanimous in seeing quarter point cut to 2.50%
Policy rate seen bottoming at 2.00% in Q2
Rate announcement on Dec, 19 0830 GMT
Link to data: reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?RIC=SERATE%3DECI
STOCKHOLM, Dec 16 (Reuters) -Sweden's central bank will cut its key rate by a quarter point later this week, with further policy easing ahead early next year if inflation remains under control, a Reuters poll of economists forecast on Monday.
All 16 economists saw a cut to 2.5% from the current 2.75%.
With Sweden's economy treading water and the central bank confident it has inflation under control, the median forecast was for the policy rate to bottom out at 2% in the second quarter.
"The weakness of the economy makes a 25 basis point cut the most likely decision next week," Capital Economics' Adrian Prettejohn said.
"We expect policymakers to cut by 25bp at both the January and March meetings, taking the policy rate to 2.0%," he said.
A minority of analysts saw rates coming down even further, with two seeing a trough of 1.5% in the third quarter of next year.
A cut on Thursday would be the fifth this year by the central bank and would bring total easing to 1.5 percentage points.
At its last meeting in November, the Riksbank cut the policy rate by an unusually large half percentage point, arguing that unless sluggish growth picked up there was a risk that inflation could undershoot the 2% target.
Analysts said the message was likely to be similar this time despite recent data showing inflation has picked up pace.
Household consumption and the labour market are weak and it will take a while for increases in real wages and cuts in mortgage rates to convince households to increase spending.
Capacity utilisation is at the lowest level since the third quarter of 2013 - excluding the pandemic period.
"The unusually high level of uncertainty, including potential trade disruptions, suggest that risks are tilted towards more gradual rate cuts, but we maintain our forecast that the policy rate will reach 2.00% by March," banking group SEB said.
The Riksbank will announce its policy decision on Dec. 19 0830 GMT.
Swedish rates and inflation: http://tmsnrt.rs/1qEN4Rz
Reporting by Simon Johnson; Editing by Alex Richardson
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