Swedish consumer price inflation seems to have slowed in August

Swedish consumer price index inflation is likely to have slowed in August. According to a Nordea Bank research report, the CPI is expected to have dropped to 0.1 percent month-on-month. Meanwhile, the CPIF reading is anticipated to have risen to 1.5 percent year-on-year.

There are many focus areas for the August inflation reading, with one being food prices, stated Nordea Bank. Indicators imply that prices of food are rising again. However, they are likely to have dropped in sequential terms. This is possibly because a small correction is expected after prices rose sharply by 1.3 percent in July, the biggest monthly rise since January 2010.

The autumn collections have hit in August in the clothing and footwear sections. This usually suggests higher prices that. Prices of clothing and footwear are expected to have increased in August, if not the price trend is downwards, added Nordea Bank.

Meanwhile, prices are likely to have been hit badly by international travel in August. This component is expected to have negatively contributed 0.3 percentage points month-on-month to the headline consumer price index. This is consistent with what seems to be a new seasonal pattern, according to Nordea Bank.

Nordea Bank’s projection for August is 0.1 percentage point lower than the central bank’s forecast. There appear to be constant challenges for the Riksbank in lifting inflation.

“This reinforces the view that the government bond-buying programme will be extended for H1 2017”, noted Nordea Bank.