Prices are rising sharply in Norway – Dagbladet.no

(Hegnar.no): Consumer price index (CPI) rose 0.6 percent from December 2015 to January 2016, mainly due to higher electricity prices. This is the highest January increase in the CPI since 2003.

The twelve-month change in the CPI was 3.0 percent in January, which is 0.7 percentage points higher than it was in December, according to Statistics Norway. The increase was in line with expectations.

Powerful cost

The price of electricity tariffs rose 20.0 percent last month, and we must back to May 2011 to find an equally high price level that we had now in January. Month change in the price of electricity generated is also the biggest in a single month since November 2007.

The network tariff also increased and had the highest monthly increase since January 2010.

Sales

January is traditionally a month of extensive tendering activity within selected commodity industries. Clothing prices fell 5.0 percent from December to January, which is a little lower down than it normally has been in this period in recent years.

The prices of furniture and furnishings and decorations fell 7.2 percent in the same period. Prices of fruit, airline tickets and books also fell markedly last month.

Cheaper fuel

The twelve-month rise in the CPI was dampened by lower prices on fuel. Diesel and petrol prices were respectively 6.8 percent and 3.5 percent lower in January than in January last year.

– As expected

Handelsbanken economist Marius Gonsholt Hov say that the price increase was as expected. In the short term, he sees higher inflation as a result of the weak krona. He believes, however, that the underlying inflationary pressures will gradually decline.

The economist believes inflation during the first half will be around 3 percent compared to last year, Norges Bank has estimated.

Nordea chief economist Erik Bruce do not think today’s numbers will have something to say for Norges Bank monetary policy. He believes lower inflation on food and rent may indicate that core inflation in Norway has peaked.

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