SWEDEN
The increase in Swedish January CPI looks quite broad-based, with several categories across core goods, services and food seeing higher-than-usual monthly inflation rates. Overall, CPIF ex-energy confirmed flash estimates at 2.7% Y/Y, notably above the Riksbank’s 2.4% forecast in the December MPR. This should keep the Executive Board’s base case of no March cut in tact, but we still have an eye on the activity data due at the end of this month.
- On a monthly basis, CPI was 0.0% M/M, CPIF was 0.4% M/M and CPIF ex-energy was 0.2% M/M. Statistics Sweden notes that the basket effect was 0.06pp, above the -0.15 to -0.20pp average cited by analysts ahead of the release. This seems a touch above expectations.
- There was a seasonally large increase in food prices in January, rising 0.8% M/M and 1.5% Y/Y (vs 1.1% prior). Food’s weight in the basket also increased to 12.4% from 11.8% in 2023.
- Rents rose 2.6% M/M, above the 0.7% average increase seen between 2010-2024. As such, the annual rate accelerated to 5.9% Y/Y (vs 5.4% prior). Rent’s weight increased to 7.9% from 6.6% in 2023.
- Recreation and culture and postal services also registered higher-than-usual monthly inflation rates, pushing up annual inflation.
- Looking at traditionally volatile components, package holidays and accommodation services weren’t major contributors to the monthly inflation rate. The weight of package holidays increased notably to 1.6% from 0.9% though.
- There were also smaller than usual falls in clothing and footwear prices, though this was offset somewhat be a deceleration in the furniture component.
- The largest contributor to the monthly CPI rate was electricity and fuels (0.33pp), but the increase of 6.6% M/M was not too dissimilar to last January’s 6.3% reading.
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