Swedish CPIF inflation came in line with Riksbank in the month of November. On a year-on-year basis, the CPIF inflation accelerated to 1.7 percent from prior month’s 1.5 percent. Excluding energy, CPIF inflation came in at 1.8 percent year-on-year, 0.1 percentage point below the Riksbank’s view.
There were many surprises on the upside. Electricity prices rose above projections and contributed 0.12 percentage point to inflation, 0.06 percentage point more than expected. Food prices rose slightly and added 0.04 percentage point to the CPIF while it was expected to have remained the same. Also prices for home electronics rose, while it was expected to have dropped.
Prices for foreign travel fell and negatively contributed 0.3 percentage point. Costs for depreciation, i.e. expenditure that is to reflect the cost of keeping a house in an unchanged condition, rose after the fall in October and contributed 0.03 percentage point.
“All in all, November CPIF inflation came out somewhat higher than we had expected. The upward surprises were related to prices for energy and goods, the later probably due to delayed effects of the weak SEK, while prices for services came out as forecast. Nevertheless, headline inflation in line with the Riksbank’s forecast underlines that the Riksbank will hike rates next week. It will be a one-off rate hike by 25bp to 0.0 percent”, said Nordea Bank in a research report.
