Core inflation (CPI-ATE) came out at 2.0 % y/y in November compared to 1.9% last month. Consensus and Norges Bank was 2.0%, Nordea 1.8%.
The main surprise to us this time was that food prices increased and gave a small contribution to the rise in core inflation. We had expected a temporary price cut on groceries. Today’s figure indicates that the rise we have seen in price growth on food earlier this autumn is lasting.
In addition to food prices transport (airfares) was somewhat stronger than we expected. Clothes and culture pulled up as expected. It is worth noticing that imported inflation now is slightly positive indicating that the NOK weakness starts to influence inflation. That should raise inflation further looking ahead.
The rise in core inflation in the autumn proved to be no temporary accident. Norges Bank forecast core inflation to rise further looking ahead and we share this view.
Nordea