Norway: Core inflation slightly below Norges Bank – Nordea

Erik Johannes Bruce, analyst at Nordea Markets, notes that Norway’s core inflation in July came in at 2.2% y/y compared to 2.3% in June while the consensus was 2.2% and Nordea was 2.1%, while Norges Bank was 2.4%.

Key Quotes

“As expected, food prices increased sharply m-o-m and in contrast to our forecast more than last year. That together with somewhat more moderate price cuts during the summer sales on clothes pulled core inflation up y-o-y. The main reason why core still did not increase (y-o-y growth in June and July is about the same before rounding) is weaker price growth on furniture etc. and culture (books and package holidays).”

“Core inflation was 0.2% points below Norges Bank’s forecast after being 0.1% below in June. That argues – all else equal - on the margin for a somewhat lower rate path if Norges Bank where to make a rate path today.”