Swedish CPIF inflation came in at 1.3 percent in August, 0.2 percentage point below the Riksbank’s forecast as well as consensus. CPIF ex energy came in at 1.6 percent year-on-year in August, 0.2 percentage point below the Riksbank’s forecast. The service inflation was low.
Prices on clothing and shoes rose below expectations, but this was balanced by prices for foreign travels rising less than forecast. August is one of two inflation readings ahead of the central bank’s monetary policy meeting in October. Overall, today’s reading was lower than the Riksbank’s forecast.
“Going forward, we see even larger deviations from the Riksbank's forecast, with inflation markedly lower. This is an important reason to why we see a rate cut around the turn of the year as the next move from the Riksbank, rather than a rate hike as signalled by the bank”, added Nordea Bank.