Norway inflation likely lower than Norges Bank's expectation

Norges Bank expects core inflation to be at 2.5% in June. The Bank expects higher core inflation as food inflation, growth on airfares and on package toursis are higher.

Nordea Bank forecasts June core inflation at 2.4% y/y and gives argument for lower core inflation. This year's summer sale on shoes and clothes most likely started with much sharper price cuts than last years. There is also strong reason for believing that base effects pulled down price growth on telecom services.  

According to Nordea Bank, "If we end up at 2.4% or 2.5% nothing much will happen in the market, while 2.3% could add to the current negative NOK sentiment. If we end up at 2.4% the gap to Norges Bank's forecast is not big enough to have any significant impact on the September decision. 2.3% on the other hand could have a marginal impact."