Price inflation in Sweden remains high.
For the month of July, the index registered 9.3 percent, according to figures released by Statistics Sweden (SCB).
It’s in line with what analysts expected and exactly the same number as in June.
Core inflation, where energy prices are not taken into account, has barely fallen to 8.0 per cent – down from 8.1 per cent in June. This is also in line with expectations.
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Increased interest rates did not lead to more unemployed people. But now something might happen.
– Numbers for the month of July show that inflation is taking hold although they were somewhat better than expected. It’s worrying, says Frida Pratt, savings economist at Nordnet Aftonbladet.
Interest rate peak in November
“With further weakening of the Swedish krona on top of all that, according to our Swedish colleagues, the stage is set for a new rate hike in September,” Handelsbanken wrote in its morning report.
Sweden’s central bank raised its key interest rate several times after the country’s price hikes. The interest rate in Sweden is now 3.75 per cent.
In addition to another increase in September, the Swedes expect another increase in November to a peak of 4.25%, Handelsbanken writes.
Weak crown
The weakness of the Swedish krona, like inflation, is a challenge for the Riksbank. Helps keep prices high.
In an effort to counter currency weakness, the Riksbank announced at its previous meeting in June that it would increase the sale of Swedish government bonds from NOK 3.5 to 5 billion.
Shortly after 8.30 am on Tuesday, the Swedish Krona was trading for NOK 0.9681. One euro is 11.8 SEK, and one dollar is 10.8 SEK.
Expensive holiday package and cheap electricity
Electricity prices in Sweden fell about 15 percent in July, according to the SCB.
At the same time, rising interest costs contribute to inflation in Norway’s neighboring countries. They were 3.5 and 3.9 percent respectively owning homes and houses in housing associations.
Prices for holiday packages rose as much as 20 percent from June to July, while prices for food and non-alcoholic beverages rose 1.4 percent.
It happens after a few months as food prices drop. According to Aftonbladet, yellow onions lead the stats – prices here have risen by 29.2 percent in the past month.
Statistics also show a sharp drop in tolls, but this is due to SCB using a new method of measurement. This takes tax-free days into account.
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