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The Riksbank Should Look Through Increase In Inflation Momentum

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Although seasonally adjusted CPIF ex-energy inflation was a strong 0.45% M/M in May (the highest sequential reading since July 2023), we don’t place too much weight on the figure due to the aforementioned one-off effects at play.

  • The Eurovision Song Contest and Taylor Swift concerts are not seasonal events, and so would not be accounted for in seasonal adjustment calculations.
  • As such, we think the Riksbank will look through the increase in inflation momentum this month, and expect a reversal in the months ahead.
  • Elsewhere, inflation breadth improved a touch in May, with 41% of components registering inflation rates below 2% Y/Y (vs 39% prior).

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Although seasonally adjusted CPIF ex-energy inflation was a strong 0.45% M/M in May (the highest sequential reading since July 2023), we don’t place too much weight on the figure due to the aforementioned one-off effects at play.

  • The Eurovision Song Contest and Taylor Swift concerts are not seasonal events, and so would not be accounted for in seasonal adjustment calculations.
  • As such, we think the Riksbank will look through the increase in inflation momentum this month, and expect a reversal in the months ahead.
  • Elsewhere, inflation breadth improved a touch in May, with 41% of components registering inflation rates below 2% Y/Y (vs 39% prior).