\n Higher energy prices and a weaker krona more than doubled CPIF inflation in September, according to preliminary estimates from Statistics Sweden.\n <\/p>\n
The numbers confirm the view that Sweden’s central bank, the Riksbank, will have to raise its key policy rate in November, according to Susanne Spector, chief economist at Danske Bank.<\/p>\n
“A rate hike in November was already more or less set in stone before this. This outcome does not change that,” she told the TT news agency.<\/p>\n
She expects at least three rate increases will be needed \u2013 raising the policy rate from today’s 1.75 percent to 2.50 percent \u2013 to get a handle on the inflation currently flooding into the Swedish economy.<\/p>\n
If the interest rate on a two million krona mortgage were to increase by the same amount \u2013 0.75 percentage points \u2013 it would boost annual interest costs by 15,000 kronor, excluding tax deductions for mortgage interest.<\/p>\n
Get breaking news alerts on the big stories that matter for foreigners in Sweden<\/p>\n
Among market traders, current pricing points to a near 100 percent probability of five rate hikes, pushing the key policy rate up to 3.00 percent at some point during 2027-2028.<\/p>\n
Spector argues that the Riksbank should have joined other central banks in raising rates at its September meeting.<\/p>\n
“It would have made sense to raise in September to stay better aligned. That likely would have supported the krona, meaning higher energy prices would have increased less in kronor terms than they are doing now,” she said.<\/p>\n
SEB interest rate strategist Amanda Sundstr\u00f6m, however, takes more of a dovish view, highlighting that underlying inflation \u2013 which strips out energy prices from the CPIF measure \u2013 is not moving upwards and therefore came in lower than expected for September.<\/p>\n
“If you look at those figures, Swedish inflation remains very low, especially compared to what we are seeing in other countries. Despite higher energy prices, price pressures in the rest of the economy remain very subdued,” she said. “More subdued than we expected, and more subdued than the Riksbank expected.”<\/p>\n
That said, SEB’s economists also expect three rate hikes from the Riksbank.<\/p>\n
In short, Statistics Sweden’s preliminary inflation figures suggest that both goods and energy prices increased more than expected in September.<\/p>\n
“That could be a sign that we are seeing a large impact from spring supply disruptions,” Spector said, referring to the fallout from conflicts in the Middle East and between Russia and Ukraine.<\/p>\n
“However, service prices came in lower than expected. That explains why underlying inflation remains flat,” she added.<\/p>\n
According to the preliminary figures, Sweden’s CPI inflation (consumer price index) rose from 0.3 in August to 1.1 percent in September, whereas CPIF (consumer price index with interest stripped out) rose from 0.7 percent in August to 1.5 percent in September, and CPIF-XE (with energy prices stripped out) remained unchanged at 0.5 percent.<\/p>\n","protected":false},"excerpt":{"rendered":"Higher energy prices and a weaker krona more than doubled CPIF inflation in September, according to preliminary estimates…\n","protected":false},"author":2,"featured_media":623258,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-623257","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/623257","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=623257"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/623257\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/623258"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=623257"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=623257"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=623257"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}