The global growth outlook has been lowered significantly since the outbreak of the Ukraine war, while inflation forecasts have been revised upward. Russia's invasion of Ukraine will have serious consequences for both consumers and producers for years to come, and energy prices will remain high. Central banks will implement a number of interest rate hikes in the near future to instil confidence in their inflation targets. We have sharply lowered our Swedish GDP growth forecast, as households are being squeezed by high inflation and rising interest rates. The Riksbank is facing a difficult balancing act, with bloated home prices and interest-sensitive households. Despite slower growth than the Riksbank expects, continued upside inflationary surprises will force its policymakers to move even a little faster than the repo rate path they published in April.