Sweden’s core inflation eased for a third straight month in September, likely reassuring the nation’s central bank (Riksbank) that it can keep interest rates at a three-year low until late next year as planned.
CPIF as well as core inflation eased, according to latest estimates.
The September inflation numbers were largely in line with forecasts. CPIF inflation stood at 3.1% y/y and CPIF ex energy at 2.7% y/y in September. CPIF ex energy was below our call (2.8%) but in line with the Riksbank’s view (2.7%).
The monthly change for CPIF excluding energy remained low and below the 2% target.
Energy prices added 0.39% point to the year-on-year figure for CPIF. We saw energy prices lifting CPIF by 0.40% point (Riksbank 0.35% point).
In all, the inflationary pressures are currently modest and its inline with the Riksbank’s view that inflation will come down around the turn of the year. Slowly there is an increasingly optimistic view regarding the growth outlook, but that is a story for the next year. Consequently, my understanding is that the Riksbank will stay on hold this year and probably also next year.
EU is pausing for now and US looking to lower rates. More in another article…
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