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Fast Comment NorwayCore slightly lower in June; as widely expected

  1. The CPI-ATE at 1.1 percent in June, slightly down from 1.2 percent in July
  2. Well in line with expectations, including Norges Bank
  3. Supporting Norges Bank’s arguments for a rate hike in September
The CPI-ATE at 1.1 percent in June, slightly down from 1.2 percent in July
Core inflation, as measured by CPI-ATE, fell marginally to 1.1 percent in June, following 1.2 percent in May. The outcome was widely expected (by us, consensus and Norges Bank). There were no major surprises here and speaking in terms of broader aggregates, we note that price inflation for imported as well as domestically produced goods and services were well in line with Norges Bank’s estimates. To be even more precise, imported price inflation was a touch higher than expected, but the deviation was too small to affect the total outcome versus expectations. The bottom line is that the monthly change was quite solid in June this year, but this was also expected given the surprisingly weak performance during the spring. Thus, the minimal change in the y-o-y rate for the CPI-ATE as a whole. The usual caveat: the figures are quite volatile throughout the summer months and we will have to wait until the July figures are released (August) before we can reach a more solid conclusion. However, for now, price developments appear to be well in line with Norges Bank’s expectations; supporting Norges Bank’s arguments for a rate hike in September.


Disclaimer

Marius Gonsholt Hov

Senior Economist

Norway

maho60@handelsbanken.no

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