Norwegian core inflation was 2.0 y/y % in December unchanged from November. Nordea, Norges Bank and Bloomberg consensus was 2.3% while Reuters was 2.2%.
We and I guess most other analyst and Norges Bank expected higher core inflation due to higher food price inflation in December. Food prices fell strongly m-o-m in December last year, but contrary to expectations fell nearly as much m-o-m this year. That means food inflation y/y was nearly unchanged from November to December. Apart from that there were as always some minor surprises, but nothing which changed the picture significantly.
Inflation 0.3% below Norges Bank’s forecast is enough to have a downward effect on Norges Bank’s next interest rate forecast. But remember core inflation has been extremely volatile in 2013 (partly due to new methods). We will have both January and February inflation before Norges Bank publishes a new interest rate forecast.
Nordea