In brief

• Sweden has raised its interest rates for the first time in more than three years.
• A similar cycle of rate hikes is underway in the Czech Republic and the euro area.
• The Polish central bank is holding rates for now, but the market expects a small increase.

Europe raises rates, Poland waits

Poland is holding rates unchanged for now, but the market is pricing in that our central bank will also eventually raise them by a small step (Szwecja, Czechy, strefa euro: Polska otoczona przez podwyżki stóp. Nadchodzi nieuchronne – Puls Biznesu).

Sweden breaks a long streak

Sweden's central bank, the Riksbank, has decided to raise interest rates. It is the first such decision by the Swedish bank in more than three years. For a country known for its loose monetary policy, this is a clear signal of a change in direction (Już nawet Szwedzi zdecydowali się na podwyżkę stóp procentowych – Bankier.pl).

Czechia and the euro area move in the same direction

Rate hikes are also continuing in the Czech Republic and the euro area. Our neighbours and main trading partners are tightening monetary policy, and the financial market increasingly expects that pressure to raise rates will also affect the Polish zloty and the Polish economy.

What it means for a small business

Higher interest rates usually translate into more expensive overdraft facilities, leasing, and investment loans. Entrepreneurs planning to take on financing in the coming months should factor in a possible increase in debt servicing costs.