GDP gap refers to the percentage deviation of GDP from the Riksbank’s assessed trends. Right-hand graph. Net figures. Sources: National Institute of Economic Research, Statistics Sweden and the Riksbank  For future inflationary pressures, the situation on the labour market plays a particularly significant role. The tighter the labour market, the higher the pressure on wage development. In our assessment, the situation on the labour market is tight. An indication of this is that labour shortages – as reported by companies in National Institute of Economic Research surveys – are at record-high levels (see Figure 2). The effect of the labour market situation on wage and price development tends to occur with a certain time-lag. There is hence good reason to believe that wages and prices will increase more rapidly in the period ahead. Our previously established criteria for starting to increase the interest rate have been met Inflation and inflation expectations close to 2 per cent and the healthy economic activity are in themselves arguments in favour of slightly reducing the support from monetary policy. But what prompted us to take this step just now? In conjunction with the two previous monetary policy decisions in September and October, we said that we would initiate slow increases in the repo rate in December or February if economic developments continued to “support the prospects for inflation”. It is, in other words, a forward-looking perspective on inflation that guides monetary policy. And in this context, not so much has actually changed since the beginning of autumn.
The figures in Table 1 have been updated with details for 2017. 11 These calculations only show interest payments and ignore effects on interest income. 9  9 [13]  Table 1. Households more affected more by interest rate adjustments than previously Interest payments for a typical housing purchase, SEK per month Sweden Greater Stockholm Housing price (SEK million) Debt (SEK million) Interest rate (%) Interest payments Increase in interest payments (+1%)  2004 1.3 0.8 3.7 1793 485  2017 3.0 2.0 1.6 1814 1161  2004 2.6 1.6 3.7 3452 934  2017 6.0 4.0 1.6 3643 2351  Note. The amounts have been adjusted for tax relief on interest payments. The table does not include amortisations. Sources: Finansinspektionen, Statistics Sweden and the Riksbank  Rate increases in line with the Riksbank’s forecast are expected to have minor cashflow effects on households as a whole ... In the Monetary Policy Report in December, our assessment was that total disposable household income would slow by about 1.3 per cent in a three-year perspective as a result of rising interest rates. 12 This must be considered a minor effect, especially bearing in mind that rising wages, among other factors, will contribute about 4 percentage points a year to the growth in disposable household income in the coming years. Total disposable income, according to our forecast, will continue to grow at a healthy rate in the years to come, despite rising interest rates.