Slightly weaker inflation speaks for rate cuts – Aftenposten

– The weakening of the krone has largely given anticipated impact on consumer prices – with clear price increases on many imported goods, says chief economist Lars Hartveit in Virke.

The Consumer Price Index (CPI) rose by 0.4 percent from March to April. The past year has been the rise of 2.0 percent, the same growth as from March last year to March this year, shows a Overview from Statistics Norway (SSB) .

Speeches for rate cuts

A slower rise in Norwegian produced goods strengthens the belief that Norges Bank cut interest rates in June, believe DNB Markets.

– Inflation trays, which helps to strengthen our already strong belief that Norges Bank will cut interest rates in June, says a senior economist Kjersti Haugland in DNB Markets.

At last week’s monetary policy meeting, Norges Bank decided to keep its key rate unchanged at 1.25 percent, but held simultaneously fixed at the interest rates are likely to be downgraded. After the CPI figures became known krone depreciated further, and the possibility of rate cuts is thus even greater now, says Haugland.

Flight prices

The largest contributor to CPI’s expenditure recreation and culture, with an inflation rate of 1.6 percent. Vacations had a seasonal price increase of 7.3 percent from January to April. Prices of furniture, household goods and maintenance of household goods rose 1.3 percent from March to April.

The increase in CPI was dampened by Airline fares fell 8.7 percent from March to April. The prices of electricity tariffs declined by 1.5 percent during the period.

The

so-called core inflation (CPI JEA), which analysts emphasize strongly, rose 2.1 percent from April last year to April this year, but fell 0.2 percentage points from March.

It is mainly airfares that have led to the decline. Core inflation is the same as the CPI adjusted for tax changes and excluding energy products.

Waited

Lars Hartveit adding that surprising drop in clothing prices is the main exception when inflation is explained. He points out that clothing prices rose slightly from March to April, but measured against April last year there was a decrease of 2.2 percent.

– Strong competition in the clothing industry keeps prices down, despite the fact that purchase prices increases, says Hårtveit.

This spring’s moderate wage and low oil prices also have a dampening effect on inflation, he said.

Published: 11 May. 2015 11:07