Inflation continues down – but a “disappointment”

Inflation in Sweden continues to fall, down to 9.7 percent in May. In April, it was 10.5 percent, according to Statistics Sweden.
Food and energy prices fell.
But it was still a disappointment, according to assessors.

It does not drop quite as much as most analysts had expected. Analysts had on average expected inflation of 9.5 percent, according to the Bloomberg news agency’s compilation.

– It was higher than expected, notes Torbjörn Isaksson, chief analyst at Nordea, who sees that the decline has come off somewhat.

Even if electricity and fuel fall in price, there is a broad price rise for goods and services, according to Isaksson.

– It was disappointing, in April we saw a softer figure, now it’s ticking up again, he continues.

The theory: The Riksbank raises the interest rate – again

Thus, it is highly likely that the Riksbank will stand firm and raise the interest rate in a few weeks.

– In combination with the weak krona, we see the Riksbank raising the interest rate, says Isaksson.

The so-called core inflation according to the CPIF measure, where interest rate effects have been excluded, amounted to 6.7 percent in May compared to 7.6 percent the month before. Here, the forecasts were 6.7 percent.

“Continued price reductions for electricity and food contributed to the lower inflation rate in May,” says Mikael Nordin, statistician at Statistics Norway.

According to Statistics Sweden, rising interest costs for household mortgages contributed 3.2 percentage points to the inflation rate according to the CPI measure.