Check that the large accordion duct from the Air Mass Meter to the throttle body has no leaks or splits. They can be hard to see down in the folds. Mine was split giving the symptoms you've got. Replacement gave a 100% fix. Check also the hoses going to/from the idle air valve below/behind the throttle body. If that duct is OK, check that the timing belt pulleys are all indexed properly - ie: that the belt hasn't jumped a tooth. With No. 1 piston at top center, the distributor rotor should be pointing at the No.1 spark plug terminal, and the camshaft pulley mark should line up with the notch in the cam cover.

Also look for vacuum leaks around the intake manifold.

Failing any issues with the above, you may be looking at a fuel pressure problem. Using the search box above and also the 700/900 FAQ's will reveal a lot of good trouble shooting info.

As others have said, a failed knock sensor is very unlikely to be associated with the symptoms you see. But you should replace it, especially when they are as cheap as this one: https://www.fcpeuro.com/products/volvo-knock-sensor-0261231046
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Son's XC70, my 83 244DL, 89 745 (Chev LT-1 V8), and XC60. Also '77 MGB and four old motorcycles. Long gone: 1981 244, 1994 940 and 1998 S90.