For years, Sweden has been warned that its dysfunctional housing market, plagued by under-supply and kept aloft by low rates and generous tax benefits was a risk to the wider economy. Now those risks are becoming reality. Households with big mortgages are reining in spending as interest rates rise and house-builders are pulling the plug on investment, tipping Sweden into recession. The country is set to be the only EU economy experiencing outright recession this year.
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