Inflation remains at 9.3 percent in July, the same high level as in June, recent figures from Statistics Norway show. According to economists, it is even more likely that the Riksbank will raise interest rates further this autumn.
– We are still far from the goal, says Robert Bergqvist, senior economist at SEB.
When the Riksbank made the decision to raise the policy rate to 3.75 at the end of June, the forecast was that there would likely be at least one more increase this year.
– If you look at the inflation outcome that we got today, I think it fits well into the puzzle that one more step is taken, says economist Robert Bergqvist.
The fact that the inflation curve temporarily flattened out during the summer is partly due to the fact that we are in the holiday season, says Bergqvist.
– There are a lot of holiday-related activities that have gone up in price, and little food that affects inflation.
Food prices on the rise – again
When food prices looked like they were going down, they now seem to be going back up. According to new statistics from Statistics Norway, food prices rose by 1.4 percent in July compared to June this year. They are thus back at the same level as in March.
The price of yellow onions, for example, has increased by 55.7 percent in one year, while the price of bread and other cereal products has increased by 11.7 percent compared to July last year.
Bergqvist adds that we are still very far from the inflation target of two percent but that we are heading in the right direction,
– The inflation problem is present, unfortunately.
Then the interest rate can be lowered
Bergqvist believes that we can approach the inflation target sometime in the spring of 2023. Then the Riksbank can open up an interest rate cut.
– There is uncertainty around this, and inflation has surprised us before. But sometime during the second quarter of next year, we believe that the Riksbank’s decision on an interest rate cut may come.
But the effect on mortgage rates can come even earlier, notes Berqvist.
– The market will run ahead, he continues.