NORWAY
Norwegian September inflation momentum eased to its lowest since November 2021, based on Statistics Norway’s seasonally adjusted series. 3m/3m SAAR inflation was 1.86% (vs 2.93% prior) – see chart.
- A handful of analysts (e.g. Goldman Sachs and Morgan Stanley) still look for a Norges Bank cut in December, partly based on a weaker inflation outlook than forecast by the central bank. The September inflation momentum dynamics offer further support to this view.
- However, we think that if the Committee wants to seriously consider a December cut, it will want to signal as such at the upcoming November 7 decision.
- Given the lower-than-expected Y/Y NSA print of 3.1% (vs 3.2% cons, 3.3% September MPR) appears largely goods driven, this may keep Norges Bank cautious and tied to its prior guidance of a cut in Q1 2025.
- Domestic consumer goods eased to 4.1% Y/Y (vs 4.8% prior) and imported goods to 1.5% Y/Y (vs 2.0% prior, 1.8% in the September MPR). Food and non-alcoholic beverage prices also fell 1.7% M/M, pulling the annual rate down to 4.0% Y/Y (vs 4.5% prior).
- Services inflation meanwhile ticked up to 3.8% Y/Y (vs 3.6% prior).
- Headline CPI was 3.0% Y/Y (vs 3.2% cons, 2.6% prior), a tenth below the September MPR projection. Alongside the lower-than-expected CPI-ATE inflation, electricity prices rose 5.2% M/M, below some analyst projections we had seen.
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