Swedish Inflation Eases to 0.9% in October, Confirming Flash Estimate

what happened

Statistics Sweden said on Thursday that the consumer price index rose 0.9% year-on-year in October, down from 1.1% in September and from a 19-month high reached the previous month. The figure matched the flash estimate published on November 5.

The slowdown was driven mainly by a 7.0% drop in food and non-alcoholic beverage prices. Fuel prices, up 25.2%, and electricity, up 14.3%, continued to push inflation higher. The agency said prices for dental services and public transport fell year-on-year because of reforms in those areas. Inflation on the CPI with a fixed interest rate eased to 1.1% from 1.5%. Month on month, consumer prices were flat after rising 0.9% in September.

why it matters

Inflation near zero reduces pressure on the Riksbank and weakens the case for tighter policy, which can weigh on the krona and shape expectations for Swedish rates.

market impact

Swedish krona and Riksbank rate expectations: softer inflation weakens the case for tighter policy

• ▼SEK pressure down — softer inflation reduces the chance of tighter Riksbank policy

tags

instruments