and the horizontal axis indicates the number of days that have passed. the repo rate is expected to have risen by about 1. 5 percentage points during the whole forecast period. in the right - hand figure, we see that, in the end of the forecast period, the fourth quarter of 2021, the repo rate is expected only to have reached a level of 1 per cent. see also the article “ what usually happens when the repo rate is raised? ” in monetary policy report, october 2018. 4 figure 4. the interest rate going forward – more “ taking our foot off the gas ” than “ applying the brakes ” slow increases compared with previous episodes 3. 5 3. 5 july 2010 to july 2011 january 2006 to september 2008 november 1999 to july 2001 forecast for the repo rate 3. 0 2. 5 low level of repo rate even at the end of the forecast period 3. 0 2. 5 2. 0 2. 0 1. 5 1. 5 1. 0 1. 0 0. 5 0. 5 0. 0 0. 0 1 000 note. left - hand graph. the vertical axis shows the change in the repo rate in percentage points. the horizontal axis specifies the number of weekdays after the first rise of the repo rate. the repo rate forecast refers to quarterly averages. right - hand graph. per cent. source : the riksbank there are several reasons why the journey towards higher interest rates is expected to be so slow this time. i have already touched on the first reason. as such substantial monetary policy measures have been required to establish inflation and inflation expectations close to the target, it is important to phase out monetary policy support at a slow rate, so that inflation continues to remain around 2 per cent going forward. there is still uncertainty regarding the strength of future inflationary pressures. the second reason is that we are operating in a new environment compared with previous rate - rising episodes. 2 an important circumstance is that global real interest rates ( i. e. interest rates adjusted for inflation ) have been exceptionally low for a long time, and in all likelihood will continue to be so for some considerable time. monetary policy cannot influence global real interest rates but must relate to the developments we see. the lower global interest rates are, the lower the policy rate must be to have the same expansionary effect on the economy. another circumstance that has changed the monetary policy landscape – and which i will address later – is that households are more affected

swedish housing market as early as in the spring of 2011. see sveriges riksbank ( 2011 ), “ the riksbank ’ s inquiry into the risks on the swedish housing market ”. see “ how are household cashflows and consumption affected by rising interest rates? ” article in monetary policy report, december 2018. 7 figure 7. households have increasingly high debt and shorter interest - rate fixation periods household indebtedness has increased shorter interest - rate fixation periods for household mortgages variable fixed note. left - hand graph. percentage of disposable income. total household debt as a share of their disposable income, totalled over the past four quarters. right - hand graph. percentage of mortgages. refers to loans from mortgage institutions. percentage of mortgages in each category is calculated based on the value of the loans. variable rate refers to interest - rate fixation periods up to and including three months. fixed rate refers to interest - rate fixation periods over three months. sources : the riksbank and statistics sweden most households can continue to pay their mortgages even at significantly higher interest rates... the question is whether households ’ interest - rate sensitivity – in combination with rising interest rates – might result in them quite simply not being able to meet their interest payments. this could lead to banks incurring direct credit losses on their mortgages, which in turn might affect financial stability. but i am not overly worried about this risk. banks do what is known as a “ left - tolive - on ” or “ discretionary income ” calculation, as part of their credit assessment. as a rule, they don ’ t grant mortgages if there is a deficit in the calculation. the estimated interest rate they use in the calculation is on average around 7 per cent, which is some way above a long - term normal level, which can be assumed to be between 4. 5 and 6 per cent. 7 calculations done by the swedish financial supervisory authority, finansinspektionen ( fi ), on a sample of new mortgage holders show that only just over 5 per cent of households have a deficit in their discretionary income calculations if the mortgage rate rises to 7 per cent. 8 there is hence nothing to indicate that the household sector as a whole would encounter significant problems in paying their interest expenses even if interest rates were to rise substantially in relation to their current levels. and, as i said earlier, our forecast indicates