As I expected airfares pulled up, increasing 21% m/m due to an Easter effect. That contributed 0.2% points to core, somewhat less than I expected. As expected base effects on food prices pulled down (and somewhat more than I had expected), decreasing core by 0.3% . It is also worth mentioning that clothes and shoes also were much weaker than expected, pulling down core by 0.1% points. That partly explains why imported inflation fell from 1.7% y/y last month to now 0.9% y/y.
It is hard to know exactly how Norges Bank will judge this figure. But my best guess is that it had not taken into account the temporary effect from airfares. In that case it will judge this figure as about as expected. But what Norges Bank will think today is perhaps not that important. We will have received the May figure before the June meeting. It will hopefully be a more thrust wordy figure since there is no Easter in May. So far we have not made a new forecast for June, but will of course look into it after today’s figure.
Nordea