Swedish inflation decelerated in November. CPIF inflation came in at 2.1 percent in the month, 0.3 percentage point below the central bank’s forecast. Excluding energy, CPIF inflation came in at 1.4 percent year-on-year, also 0.3 percentage points below the central bank’s forecast.
Prices were low throughout the board. Prices for goods came in below forecast, which fell in contrast to the projection of a rise. One reason is lower than expected food prices, saving off 0.02 percentage point of CPIF sequentially. Services inflation also disappointed, remaining greatly unchanged at a too low level.
“Food prices should rise and services inflation pick up going forward, but recent inflation readings are no doubt a setback for the Riksbank. For now, we stick to our call that the Riksbank will hike rates next week, but it is an increasingly close call, basically close to “50-50””, said Nordea Bank in a research report.
