Fast Comment Sweden - Macro Research - Handelsbanken Capital Markets


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Fast Comment SwedenInflation in October

  1. Inflation roughly in line with expectations
  2. Core inflation holding up well - Riksbank will not be worried by this outcome
Inflation roughly in line with expectations
The October data for Swedish consumer prices show that CPIF inflation fell to 1.8 percent y-o-y, from 2.3 percent in September (-0.1 percent m-o-m). This was below the consensus estimate, and also a touch lower than our own estimates (consensus median 2.0 / Handelsbanken 1.9 percent y-o-y). In its October Monetary Policy Report (MPR), the Riksbank expected an inflation reading in line with our estimate. As for CPI and CPIF, excluding energy, there was a deceleration for both in terms of annual percentage change (1.7 and 1.8 percent y-o-y respectively; our estimate as well as the Riksbank's MPR: 1.8/1.8 percent y-o-y, respectively). Despite well-behaved inflation, the krona has weakened since the CPI release.
Core inflation holding up well - Riksbank will not be worried by this outcome
Please see charts and comments below.

 Service prices still rising fast. Energy and goods prices surprises on the downside.

 Huge base effect in energy prices as last year's October prices spiked and prices fell this year.

New seasonal pattern in package tours, in line with expectations

 Volatile air fares lower than our estimate

 Underlying inflation healthy - CPIFXE as expected today, median-CPI edges back up and inflation continues to look broad-based.

 Inflation in line with target

Source: Macrobond


Johan Löf

Senior Economist


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