Swedish CPIF inflation came in line with consensus expectations but lower than the central bank’s forecast in October. On a year-on-year basis, CPIF inflation accelerated to 1.5 percent from 1.3 percent seen in the prior month, as compared with central bank’s expectations of 1.5 percent. Excluding energy, CPIF came in at 1.7 percent year-on-year.
The headline consumer price index came in at 1.6 percent year-on-year, slight acceleration from 1.5 percent seen in the prior month.
The month saw some surprises. Food prices fell, subtracting 0.07 percentage points from the CPIF month-on-month print. This was offset by prices for foreign travel, adding 0.01 percentage point. The rise in prices for foreign travel might be reversed in November. Therefore, the outcome is slightly lower than the headline figure implies, noted Nordea Bank.
“Our preliminary forecast is that CPIF ex energy will remain unchanged at 1.7 percent y/y in November and December, below the Riksbank’s view at 1.9 percent and 2.0 percent, respectively. This will disappoint some members of the Riksbank’s Executive Board, but will probably not prevent the bank from hiking rates in December. It will be a one-off rate hike in December by 25bp to 0.0 percent in order to end the era with negative rates”, added Nordea Bank.
