Sweden’s central bank has today left its key rate unchanged at 4%, after a year and a half of successive hikes aimed at reining in inflation.

The Riksbank joins the US Federal Reserve and European Central Bank which also paused their rate hike campaigns at their latest policy meetings after inflation rates slowed.

The Swedish central bank said in a statement that while inflation has fallen it was “still too high”, and it was “prepared to raise the policy rate further if inflation prospects deteriorate.”

“All in all, the Executive Board assesses that monetary policy needs to remain contractionary, but that it is appropriate now to hold the policy rate unchanged,” the bank said.

Sweden’s consumer price index came in at 6.5% in October, according to Statistics Sweden, the same as it did in September.

Adjusted for fixed interest rates (CPIF) – the figure used by the Riksbank to guide monetary policy – was 4.2% in October, while the bank targets inflation around 2%.

“Prices for services are increasing at a rapid pace and contributing significantly to total inflation. In addition, the krona is still unjustifiably weak, which is holding up the rate of price increase for goods,” the bank said.

The Swedish economy is struggling to recover, contracting by 0.8% in the second quarter compared with the previous quarter.

Against this backdrop, analysts at Capital Economics noted that they “would be surprised if the Bank does in fact raise rates again,” despite its insistence that it was ready to do so.

The Swedish government recently said that the country was going through “economic winter” due to persistently high inflation and an uncertain international environment.