Prisveksten økte til 3,3 prosent i august

Inflation rates in Norway increased by 3.3% in August, according to the latest data from the Statistics Norway (SSB). This marks a rise from 3% in July and surpasses the predicted 3.2% by the Norwegian Central Bank, as reported by Bloomberg. Core inflation, which excludes energy prices and tax changes, is the focus for the Central Bank when considering inflation and potential interest rate decisions.

Core inflation was expected to rise to 3%, up from 2.7% in both June and July. The Central Bank's interest rate decision remains uncertain as it was at 3.3% in both June, July, and August of this year.

The decline in daycare fees, set by the government a year ago, contributed to the inflation increase since no such decrease has occurred this year. Excluding parental fees for daycare and other administered prices, inflation steadied slightly in August, as per SSB. Food prices dropped by 1.4% month-over-month, from July to August, a common occurrence for food prices to decrease slightly in August. The food prices are now 1.6% higher than a year ago.

The uncertainty surrounding a potential interest rate hike in September has prompted the Central Bank's chief economist, Kjersti Haugland, to express her concerns. The bank had anticipated a further rise in core inflation to 3.2%. Haugland questions whether this stabilization is enough for the Central Bank to maintain its September hike plan or wait instead.

Haugland emphasizes the importance of the upcoming regional bank network's report as a key indicator before the interest rate decision. Business surveys indicate a tense atmosphere in the Norwegian economy, with inflation figures becoming a significant point of discussion.

The Norwegian economy has been under considerable pressure due to inflation figures, released two weeks before the Central Bank's interest rate decision. Economists have relied heavily on these figures to gauge the Central Bank's potential actions. The primary question remains whether inflation will continue to stay below the Central Bank's forecast or rebound after the summer.

The prevailing sentiment is that it is still a "hard sell" for an interest rate hike, according to Dane Cekov, a currency and interest rate strategist at SB1 Markets. Cekov highlighted that prices are still "clearly lower" than what the Central Bank had anticipated. Cekov stresses that the Norwegian Central Bank still faces an internal inflation problem, particularly with Norwegian goods being affected.

The Bank's governor, Ida Wolden Bache, stated that while it was fortunate that inflation decreased in the summer, it was too early to determine whether inflation expectations had changed significantly. Haugland, from DNB Carnegie, believes the Central Bank is now more concerned about inflation rates than before, stating that the bank is willing to tighten monetary policy if necessary.