STOCKHOLM, Oct 23 Sweden’s central bank slashed its key interest rate by a surprisingly sharp 50 basis points on Thursday, the second policy easing this month, and said more rate cuts were in store as it battles a global financial crisis.

In a major U-turn, the Riksbank showed it is now focused on keeping the economy afloat and has signalled inflation is far less of a threat. Just last month the central bank had raised rates and highlighted lingering worries about price pressures.