Sweden: Inflation forecast - August inflation preview

Danske Research Team Danske Bank A/S

August inflation is expected to show core inflation at 0.74% year-on-year, CPIF at 1.00% and CPI at 0.59%. All tax cuts and subsidies are now in place, so there are no new effects on CPIF-CT or CPIF-XE-CT in August. The pick-up in inflation momentum seen over the summer is likely to continue, and we expect stronger underlying price pressure to start feeding through to consumer prices during the autumn. Looking further ahead, we are concerned about the El Niño weather phenomenon affecting global food commodity prices from the fourth quarter onwards. The current outlook indicates that El Niño could be stronger than usual, and possibly the strongest on record. A typical El Niño is expected to raise global inflation by 0.1-1 percentage point. A stronger-than-usual El Niño therefore creates upside risks to global food inflation and energy prices.

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Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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