Earlier in January, inflation increased to 3.3 percent after being at 2.3 percent in December. That according to KPIF, where interest rate changes are not taken into account.
Fuel prices were 11.5 percent lower in February compared to the same month last year. However, prices increased compared to January by 0.1 percent. The main reason why the inflation rate is decreasing is electricity prices:
– Lower electricity prices contributed to housing costs falling in February, says Caroline Neander, price statistician at Statistics Sweden, in a press release.
Dropping more than expected
The expected reduction was between 2.6 and 2.8 percent. Alexander Norén believes that it is not a remarkable reduction, but that it is good news for those hoping for interest rate cuts in the near term.
– In summary, we can say that on a broad front it is better than expected. That is good news, he says.
How quickly and by how much the Riksbank will lower the policy rate depends on how quickly inflation falls.
– The interest rate bites with a delay. They don’t want to lie down and brake for too long, because in the end the “Sweden car” stops completely, says Alexander Norén.
