Inflation Shock gives Norges Bank-doubt – Economy sector – Hegnar.no – HegnarOnline

The underlying inflation (CPI-ATE) was 3.2 percent in June, according to Statistics Norway, up from 2.4 percent in May. It was also full 0.8 percentage points higher than what analysts on average had expected, according to Bloomberg.

Only twice last 12 years, in October 2008 and June 2009, underlying inflation, which it disregarded from tax changes and energy, higher – CPI-ATE increased both times 3.3 percent, Finance writes newspaper.

And only once, in May 2013, missed analysts’ more than this time. Then they waited an inflation rate of 0.5 percent, while gold standard showed 1.4 percent.

In June it was expensive to eat, more expensive fuel, and it was much more expensive to fly.

Overall CPI increase rose to 2.6 percent from 2.1 percent in May.

Two CPI figures before the monetary policy meeting
Norges Bank lowered its key rate to 1 percent in June and estimated a high likelihood of new rate cuts in the autumn, writes Finansavisen

As chief economist Frank Jullum and Danske Bank Markets presented updated forecasts for over two weeks ago, was one of the conclusions that Norges Bank probably not would cut interest rates further.

– depreciable you the possibility of rate cuts now, after inflation figures?

– No. says Jullum Finansavisen.

He notes that industry figures in the past has been weak, both PMI-one and industrial production index, which has caused him to feel that there was something more likely with rate cuts.

– We are where we were. We think it is most likely that no rate cuts in September, says he said.

The crown is 2.3 percent weaker than Norges Bank has assumed, but strengthened markedly yesterday. In two days, the euro has fallen from 9.10 to 8.90 million, while the dollar fell from 8.22 to 7.97 million.

“The changes this month must be seen in the context of the measurement points around the end of school in June, “says SSB.

– I do not think June figures notifies some new trend. I expect that underlying inflation will be around 2.5 percent this fall, says Jullum Finansavisen.

– Fortunately, there are two inflation numbers before the monetary policy meeting in September.

When will Norway Bank also presented a new regional network report, which shows the trend in business.

The weaker krone
Senior Economist Marius Gonsholt Hov Handelsbanken estimates that the more expensive flights lifted the domestic inflation by 0.4 percentage points on an annual basis.

“These sharp upturns are normally reversed next month, so it’s something we should look through,” he writes in a note.

“That said, even adjusted for noise from flights, the domestic inflation significantly higher than expected in June.”

The inflation figures make September cut more uncertain, says Handelsbanken economist who according Finansavisen will see an July figures before concluding closer.