When Riksbank governor Erik Thedéen told about the interest rate increase on Thursday, he pointed in particular to the worrying price increase for services.
According to the governor of the Riksbank, they closely follow Statistics Norway’s (SCB’s) statistics, and dive deep into the numbers, especially when it comes to the scarlet bars showing service inflation.
But Robert Boije thinks that the Riksbank needs to dive even deeper.
– Service inflation is strangely high. It is unreasonable that the prices of services rise to the same extent as goods, which usually means higher commodity costs and investments.
Fit on?
This may raise the suspicion that the companies may have taken the opportunity to raise more than necessary.
– I would like the Riksbank to do a better analysis, says Robert Boije.
Anyone who asks Statistics Norway what kind of services are increasing in price gets the answer veterinary services, ski rental, private car leasing, restaurant and hotel visits, gyms, TV, film and music services, entrance tickets to amusements, haircuts, animal insurance – a whole lot .
But most of all, interest costs for households have risen. Although the Riksbank shaves it off when they look at inflation, they use the CPIF measure, where interest rates are not included. At least not directly.
Nobody knows why
Still, interest rates can sneak in the back way. Even gyms, hairdressers and ski rental companies may have interest expenses that they need to compensate for. The question, which Erik Thedéen also received in connection with the interest rate announcement, is whether the interest rate increases in themselves can drive up prices. But Thedéen claimed that the impact of interest rates is quite limited, and that the cooling effect is considerably greater. Besides, the cooling is the point. We must simply reduce our consumption, according to the Riksbank.
Robert Boije also does not think that the effect needs to be huge, but he thinks that the Riksbank needs to examine it more closely.
– It is to be able to make a more effective forecast, and not raise the interest rate more than necessary, says Robert Boije.
Mattias Persson, chief economist at Swedbank, however, does not think that the Riksbank is groping in the dark when it comes to service inflation. Although no one can say for sure why service prices are rising.