Norway imported inflation likely to rise in coming months

Norway core inflation came in at 2.4%, below Norges Bank's expectation and consensus at 2.5%.

Food prices rose more than we had expected and pulled up core inflation close to 0.1% point. On the other hand the rise in airfares was very moderate this February pulling down year on year growth in core. 

Add to this that the rebound in prices and clothes was less than expected. That argues for a stronger rebound the coming month when the winter sale is over.

Core inflation were slightly below forecast this months, but was above last month.  Norges Bank will conclude that current inflation is about as expected

Nordea notes in a report on Tuesday:

• Imported inflation remained unchanged year on year, but there were still some signs of the weakening of NOK with rise in prices on audiovisual equipment etc.
   
• Imported inflation will rise in the coming months when the NOK weakening toward the end of 2014 start having an stronger effect. That will be no surprise to Norges Bank.