CPI Jumps to Highest Since '87

NORWAY OCT CPI +0.3% M/M (FCST -0.2%); SEP +1.4% M/M

NORWAY OCT CPI +7.5% Y/Y (FCST +7.1%); SEP +6.9% Y/Y

NORWAY OCT UNDERLYING CPI +5.9% Y/Y (FCST +5.5%); SEP +5.3% Y/Y

• Norwegian CPI saw an upside surprise in the October data, accelerating by +0.3% m/m and +7.5% y/y. The headline print was a 0.6pp jump from September and 0.4pp above consensus expectations of +7.1% y/y.
• Despite energy and gas prices stalling, only marginal declines in prices for food, furnishings and hospitality were recorded over the month.
• Substantial upticks in clothing (+1.8% m/m), communications (+1.4% m/m), transport and recreation (+0.9%m/m) drove headline CPI higher and imply that prices continue to accelerate (albeit slower) in a broad-based manner. Underlying inflation also surprised, surging by 0.6pp to +5.9% y/y.
• Norges Bank raised rates by 25bps in November, the slower pace of tightening signalling an end of front-loading. The higher-than-expected CPI print will be troubling for the Norges Bank board. However, given the bank's willingness to look through higher underlying CPI in the past, it is unlikely to prompt the bank to re-accelerate their tightening cycle in December.