Sweden's central bank raises key rate to 2.0% as expected, plans to hike again

STOCKHOLM, Nov 4 (Reuters) - Sweden's central bank raised its policy rate by a quarter point to 2.00% on Wednesday as expected and said it will likely be raised further in the coming year.

"If the outlook for inflation and economic activity holds, it is likely that the policy rate will be raised further in the coming year, in line with the policy rate forecast in September," the central bank said in a statement.

The Riksbank has been growing increasingly concerned that supply chain problems and high energy costs caused by conflict in the Middle East will feed into prices and push inflation above the 2% target.

Holding it back from hiking rates has been a sluggish economy, but that worry has faded. In September, the Riksbank said policy tightening would probably start this year and could be speeded up if inflation picked up sharply.

Nevertheless, analysts expect the central bank to take a cautious approach.

Headline inflation remains relatively muted, while the Swedish crown has strengthened in recent weeks, dampening imported inflation.

The Riksbank will announce its next policy decision on December 16.