prices in sweden. but over the past year the trend has levelled off, and the krona has even weakened slightly so far this year ( see figure 5 ). the development of the krona is therefore probably mainly a partial explanation for the earlier low inflation, and is less so now. a further explanation for the low inflation in sweden is that the uncertain economic climate in the wake of the european debt crisis has meant that companies have not been able to pass on cost increases to consumer prices in the same way as before. moreover, their margins have been squeezed by the stiff competition. 2 this picture is confirmed by the preliminary results of the survey we made together with the national institute of economic research, where we asked 1, 500 companies in mainly the services, retail and construction industries what factors have significance for their pricing. 3 but inflation in sweden has repeatedly been lower than both the riksbank and market analysts have expected ( see figure 6 ). i consider it very important that we continue to carefully analyse the reasons for the low inflation, both in sweden and abroad. an interesting question is what role global and domestic factors respectively will play for inflation in individual countries, something that the bis discusses in its most recent report. 4 the bis points out the structural effects of globalisation and increased world trade that have increased competition and may have contributed to squeezing prices in many parts of the world. household indebtedness has been considered in the monetary policy decisions as you know, i and my colleagues on the executive board have also discussed the high level of household indebtedness at monetary policy meetings in recent years, as it could comprise an article in the july monetary policy report, “ why is inflation low? ” describes the possible reasons for the low inflation in sweden. we will return to our analysis of the questionnaire in the early autumn. see “ 84th annual report, 1 april – 31 march 2014 ”, bank for international settlements, 2014. bis central bankers ’ speeches a risk to the economy in the longer run. swedish household debt has risen very substantially since the mid - 1990s. even if the increase in indebtedness, measured in terms of debt in relation to disposable income, has slowed down in recent years, the level is still very high in a historical perspective ( see figure 7 ). the development of household debt is linked to the development of housing prices, which is not so strange as housing purchases as largely financed through loans ( see figure 7 ). a

consideration. as i see it, there are also clear signs that economic activity is about to improve, and the conditions are therefore right for stabilising inflation around 2 per cent by means of a smaller cut in the repo rate. moreover, the smaller repo - rate cut is more in line with our earlier actions, which was reflected in the market expectations of a 0. 25 percentage repo - rate cut. i do not think one should surprise economic agents unnecessarily, and our actions should as far as possible be predictable and long term. i would like to emphasise that there is, on the whole, consensus among the executive board with regard to economic developments and monetary policy. as i have said before, it is a question of a difficult balancing act, and it is natural that there will be some minor differences of opinion on the assessments. one of the reasons why we have an executive board consisting of several members is that different assessments and approaches can be tested against one another, which should ultimately lead to better decisions. in addition to the agreement on economic developments and the direction for monetary policy, there was also broad unity among the executive board that household indebtedness is a risk that needs to be managed. the low interest rates mean that there is an increased risk that the economy will not develop in a way that is sustainable in the long run. there are thus now even greater demands for measures within other policy areas to deal with household indebtedness and developments on the housing market. macroprudential policy plays an important role in this context. welcome framework for macroprudential policy – it improves the conditions for managing household indebtedness one message i have conveyed time and time again – including in my august speech last year – has been that a framework for macroprudential policy would facilitate the monetary policy deliberations. 8 more accurate tools could be used to manage household indebtedness ( see the lower half of the diagram in figure 8 ), at the same time as monetary policy could to a greater extent focus on the inflation target within the normal forecast period ( see the upper half of the diagram in figure 8 ). one must bear in mind that the inflation forecasts in the figure are calculated on the basis of the current reporate paths. in july, the repo - rate path was lowered substantially, and without this downward revision to the path, the forecast for inflation would have been even lower. see also my speech “