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Fast Comment NorwayCore inflation increases more than expected in July

  1. The CPI-ATE at 1.4 percent in July, up from 1.1 percent in June
  2. Above consensus’ and Norges Bank’s expectations
  3. Volatility is high over the summer, but inflation supports Norges Bank's strategy from June
The CPI-ATE at 1.4 percent in July, up from 1.1 percent in June
Core inflation, as measured by CPI-ATE, increased to 1.4 percent in July, following 1.1 percent in June. The outcome was somewhat stronger than expected as Norges Bank, consensus, and we, all had 1.2 percent. Looking at the details, prices for domestically produced goods and services and prices for imported consumer goods overshot Norges Bank’s projections in July. Prices for food and non-alcoholic beverages, in particular, contributed to the rise in the annual rate of core inflation. Volatility in July is higher than any other month and has been increasing over the last few years. Norges Bank was always likely to underplay any deviation from its projections over the summer, and especially in July. However, with both the June and July prints in line, or above its expected inflation path, very little suggests that Norges Bank will deviate from its strategy at the upcoming meeting next week, and we continue to expect that the central bank will increase the policy rate by 0.25 percentage points at its meeting in September.


Source: Macrobond


Halfdan Grangård

Senior Economist


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