Danish inflation remains unchanged in June, likely to average 0.9 pct in 2018

Denmark’s inflation continued to be the same in June. On a year-on-year basis, Danish inflation remained at 1.1 percent. Three-quarters of the rise in consumer prices was because of increased prices of transport and housing. Core inflation stayed at 0.7 percent.

On a sequential basis, consumer price index dropped 0.1 percent in June, mainly driven by lower prices of clothing and footwear which subtracted 0.17 percentage point from the headline inflation on a sequential basis. But, this follows the usual seasonal patterns with summer sales of clothing in June. Thus, measured year-on-year prices of clothing and footwear have increased slightly.

On a year-on-year basis, inflation stayed at 1.1 percent, the highest level since November 2017. Housing and transport continue to be the main contributors. Together these two categories account for over 0.8 percentage point of the total rise in year-on-year inflation.

Denmark’s inflation is expected to remain widely unchanged in the months ahead, noted Nordea Bank in a research report. Positive base effects from increased prices of petrol are expected to exert upward pressure on year-on-year inflation figures. Meanwhile, increased rents on summer houses might make a considerable positive contribution in July as well as in August. Falling prices of package holidays are expected to make a negative contribution in the coming months due to the very warm weather in Denmark.

“In total, we expect Danish inflation to average 0.9 percent in 2018 – down from 1.2 percent in 2017. In 2019, we expect inflation to average 1.4 percent”, added Nordea Bank.