Sweden’s November consumer price inflation likely rose 0.1 pct, travelling prices the main driver

Sweden’s consumer price inflation is likely to have accelerated in November in sequential terms. According to a Nordea Bank research report the CPI index is set to have risen 0.1 percent, whereas the CPIF is likely to have come out at 1.6 percent year-on-year that is 0.1 percentage point below Riksbank’s forecast. Risks are skewed towards the downside.

November inflation is likely to have been driven by travelling prices. The seasonal pattern signifies that prices declined in November. But the fall is expected to have been less than normal as most of the autumn break was in November in 2016. Furthermore, Statistics Sweden changed method in 2016, gauging prices for foreign travelling more evenly over the month. This suggests that the rises in prices during the start of the month might impact the CPI.

“Our call is that prices for foreign travelling shaved off 0.1 percent point in November, compared to -0.3 percent point in the same month last year”, added Nordea Bank.

Meanwhile, food prices continued to increase slightly whereas prices for footwear and clothing are expected to have been largely unchanged. Prices of fuel and electricity moved in opposite directions, nearly balancing each other. Noticeably, both trends have been reversed so far in December, with fuel prices increasing but electricity declining, said Nordea Bank.

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