Figures from Statistics Norway showed earlier today a core inflation (CPI-ATE) in October stood at 2.5 percent annually.
It was up 0.1 percentage points from September, and also higher than the consensus of 2.3 percent.
Last report before the next meeting
But even if inflation was thus higher than expected, considering the macro analysts today’s figures as neutral for Norges Bank.
– Since CPI figures for November released just one day before the official interest meeting on December 11, this last report, the central bank will have before it concludes its analysis, writing macro economist Ingvild Borgen fence at Handelsbanken Capital Markets in an update.
– Since core inflation were significantly under Norges Bank’s estimates in September, but the line in October, we believe that the central bank will consider the development to be in line since September, thus neutralizing the interest rate path, she continues.
Cuts in the interest rate scenario?
Commercial Bank macro team, led by chief economist Knut Anton Mork, points out that developments in retail, manufacturing and labor has been relatively weak since September.
– We therefore expect a downward revision of interest rate path in December. But the marked weakening of the krone will probably prevent a clean cut, writes Borgen Gjerde on.
Chief Economist Shakeb Syed at Sparebank 1 Markets believes according to TDN Finans that downside pressure inflation poses to the interest rate path is now neutralized.
He also believes in a downward adjustment of the interest rate path in December, pointing to low interest rates abroad together with an oil-driven slowdown in the Norwegian economy, and that the interest rate cut if oil prices remain at current levels.
Syed was the way the guest of HegnarTV last Thursday. See the broadcast of recordings here.
Read also: – Now the price of oil to bite even for Saudi Arabia
Flights surprised
Nordea Markets seem to be surprised by the first of the prices of airline tickets, which defied the seasonal pattern and increased in October.
The prices of clothing and shoes also rose slightly more than expected.
– Norges Bank will most likely conclude that inflation is as expected, writes chief analyst Erik Bruce.
– Clean Cut sits deep
The fact that inflation is “spot on” in relation to the Central Bank’s latest monetary policy report, decreases according to the chief economist Frank Jullum Danske Bank Markets likelihood of a proactive interest rate cut in December .
– Even though oil prices are lower, inflation is on target, unemployment almost unchanged and the exchange rate weaker, he says to TDN Finans.
Both Jullum and senior economist Kyrre Aamdal DNB Markets believes it takes a lot before we get a rate cut in December.
– There must be extensively revised second estimate of Norges Bank should cut interest rates in December, which we believe will be the case, writes Aamdal in an update.
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