Sweden's central bank delivered a half percentage point interest rate hike on Thursday, taking the benchmark rate to 0.75 percent starting July 6.

As late as February this year, the Riksbank had forecast no change in the benchmark rate until 2024, but price rises from fuel to food have pushed up the pace of inflation. 

The central bank also flagged further sharp tightening ahead as it seeks to get to grips with inflation running at a 30-year high.

"The risk of the high inflation becoming entrenched in price setting and wage formation has ... increased," the central bank said in a statement.

"The Executive Board's forecast is that the policy rate will be raised further and that it will be close to 2 percent at the start of next year."

Analysts in a Reuters poll had forecast the half-point hike following a surge in headline inflation to 7.2 percent in May, with a further 50 basis point (bps) hike in September – the next rate-setting meeting.

The central bank targets 2 percent headline inflation.

The Riksbank is not alone in setting aside worries over growth to focus on inflation. The U.S. Federal Reserve raised rates by 0.75 percentage points at its most recent meeting and Norway by 50 bps. 

The European Central Bank is set to raise interest rates for the first time in a decade next month, though the hike is expected to be by a quarter-point. 

(With input from Reuters)