In fact the Inflation Report published on the same day also showed that inflation forecasts had been revised downward and were below the 2 percent target at every horizon. The Executive Board's statement pointed out that "there is also reason to observe that household indebtedness and house prices are continuing to rise rapidly."
4 It then said: "Given this, the Executive Board decided to raise the repo rate by 0.25 percentage points at yesterday's meeting." Not surprisingly, market participants took this statement to mean that the Riksbank was setting the policy instrument not only to control inflation but also to restrain house prices.