Norwegian core inflation remained the same in October. On a year-on-year basis, the core inflation rate was unchanged at 2.2 percent. Norges Bank had anticipated 2.3 percent but the figure should not change the view of Norges Bank, said Nordea Bank in a research report. Consensus expectations were for 2.3 percent.
In spite of core inflation coming in line with expectations, there were some surprises in the details. Food and beverage prices and airfares surprisingly dropped. Meanwhile, many of the core inflation components were slightly on the upside, especially post and telecom services.
The figure released today was slightly on the downside to the central bank, but last month was somewhat on the upside. Therefore, overall core inflation is consistent with the central bank’s view.
“We will receive one more CPI figure before Norges Bank’s interest rate meeting in December. The central bank forecasts inflation will fall to 2.0% in November. The probability that inflation will be on the downside to Norges Bank's forecast is rather low. In this case, inflation should not materially impact the December rate path”, added Nordea Bank.
