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Sweden's economy stalled in the third quarter, showing no growth compared to the previous three month period, preliminary data from the Statistics Office showed on Monday.
Gross domestic product (GDP) was unchanged from the previous three months. Year-on-year, GDP contracted 1.2%, the Statistics Office said.
In the second quarter , the economy shrank 0.8% from the previous three months period and 1.0% from the year earlier quarter.
"The Swedish economy remains surprisingly resilient," Swedbank said in a note. It said the third-quarter flash figures, which are likely to be revised, pointed to a full-year contraction in GDP of around 0.5%, a bit better than many analysts have been predicting.
"The outcome does not change our view that the Riksbank will hike (rates) also in November," Swedbank said.
The sluggish economy is not what will prompt a hike, but the central bank is worried about the weak currency, which is adding pressure to import prices.
The Riksbank wants inflation back to its 2% target promptly and at it's last meeting, when it hiked the policy rate to 4.00%, the central bank said it might need to do more.
Markets are pricing in a strong chance of a rate hike either in November or early next year.
In September, the economy shrank 0.5% compared to the previous month. (Reporting by Simon Johnson, editing by Terje Solsvik)