Danish inflation accelerates in November, likely to move higher in months ahead

Denmark’s inflation accelerated in November, coming in line with consensus expectation. The consumer price index rose to 0.4 percent year-on-year. Core inflation also rose up to 0.4 percent. The upward movement in inflation is likely to continue, mainly because of higher oil prices, said Nordea Bank.

Housing positively contributed the most to the inflation in November, adding 0.36 percentage points to the year-on-year figures. Moreover, recreation & culture and restaurants and hotels assisted in pushing Danish inflation higher, stated Nordea Bank.

Meanwhile, the sharp fall in prices on telephone services that was witnessed in July continues to exert a solid downward pressure on Communication. Telephone service prices fell 12.8 percent year-on-year in November, thereby negatively contributing 0.23 percentage points to the overall CPI. This led to a solid downward pressure on services prices that rose just 1.1 percent in November.

“We expect Danish inflation to continue to move higher over the coming months as the base effects from the lower oil prices will diminish. We expect Danish inflation to go above 1 percent in March 2017”, added Nordea Bank.