Sweden: Inflation climbs to nearly-four-year- high in January
January 14, 2016
In January, consumer prices fell 0.3% over the previous month. The result contrasted the 0.1% increase recorded in December but beat market expectations of a 0.6% decline. According to Statistics Sweden (SCB), the largest increases were for the housing, water, electricity, and fuels and fuels component, while clothing and footwear prices saw the largest decrease.
Inflation in January was 0.8%, up from 0.1% in December. The figure marked the highest level since June 2012, and the sixth increase in annual consumer prices since May. This will take some pressure off the Central Bank, which has been struggling to bring inflation in line with its 2.0% target. To this end, the Bank has employed unconventional policy measures, including negative policy rates and a government bond-buying program, since the beginning of 2015. Annual average variation in consumer prices increased from a flat reading in December to 0.1% in January.
Meanwhile, core inflation—defined as the CPI with mortgage rates held constant—was 1.6% in January, which was up from the 0.9% increase tallied in December.
Author: Robert Hill, Economist