Norwegian core inflation rate remains unchanged in June

Norwegian inflation figures came in close to Norges Bank’s forecast. Core inflation rate came in at 2.3 percent year-on-year, unchanged from May. Consensus expectations were for 2.3 percent while the central bank had expected 2.4 percent.

The main scenario was as expected. Food prices rose sequentially and more than last year, pulling up the core rate. Softer sales activity on both clothes and furniture’s also pulled up. The main reason why core still did not increase was that culture and recreation pulled down, partially due to prices on package holidays were raised less sequentially than last year.

“This figure was very much as expected, and Norges Bank will ignore inflation 0.1 percent point below forecast. Norges Bank will hike in September and we also think it highly likely that it will signal such a hike clearly at the August meeting. However, we are to receive the July inflation figure before that and July has often suprised before”, said Nordea Bank.