Airline fares turns violent – Dagbladet.no

(Hegnar.no): Consumer price index (CPI) rose by 0.6 percent in June. Over the past 12 moon ends CPI as 3.7 per cent, it appears from the latest figures from Statistics Norway.

Core inflation (CPI-ATE), which is the consumer price index adjusted for tax changes and excluding energy products, rose by 3.0 per cent last year.

Both numbers were far above forventnigene among macroeconomists. Norges Bank had such a forecast for core inflation of 2.7 percent.

Food

Food prices rose by 1.1 percent in June, while the normal is that food prices fall by around 0.5 percent in June. It was especially fruits and vegetables that weighed heavily.

A weaker krone has resulted in higher import prices in the past year, but it will gradually decline going forward, explains macro economist Marius Gonsholt Hov Handelsbanken.

The increase of imported food rose 3 0 percent, while imported goods increasing by 4 per cent last year, which was unchanged from the previous month.

The monthly change in the CPI was dampened by lower prices of furniture, furnishings and decorations, it says.

Large fluctuations

The rise in the annual growth in CPI was mainly caused by the price of electricity, which rose 2.8 percent from May to June 2016, but fell 7.7 percent in the same period last year.

Price developments flights pulled in the opposite direction. They rose 18.4 percent from May to June 2015, but rose only 1.9 percent in the same period this year, it appears from the inflation report from Statistics Norway in June 2016.

Clothing prices increased by 6.0 per cent from June 2015 to June 2016, while the prices of furniture, furnishings and decorations rose by 6.7 percent, and airline fares rose 9.4 percent.

Volatile months

Norges Bank manages for an inflation target of 2.5 percent and core inflation has now been above this target long. All else being equal would it said mean it certainly is not urgent for the Bank to reduce its key interest rate further.

Macro Economist Marius Gonsholt Hov Handelsbanken points out that core inflation may be very volatile throughout the summer months and that it be influenced by sales and price adjustments.

He will not infer anything about the extent to which Norges Bank will school to June figures in setting interest rates, but stresses that both will get inflation figures for July and August for the next monetary policy meeting in September.

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