Statistics Sweden released the flash CPI figures today, and the numbers are surprisingly good.

The CPIF (which excludes mortgage rates) fell to just 0.8 % in April — half of the previous month’s level and well below the market’s expectation of 1.2 %.

The temporary VAT cut on food appears to have had a clear effect, helping to offset the impact of higher fuel prices caused by the Iran/US tensions.

Remember that CPIF already subtracts the effect of interest rates. The full CPI data will be released next week.

The Riksbank’s target is 2 % inflation with a tolerance band of ±1 %.

In a normal world, the Riksbank would be expected to cut the policy rate at tomorrow’s press conference. But with Erik Thedéen as governor — a well-known interest rate hawk — I expect the rate to remain unchanged.

This is exactly what I predicted last month.However, he might still refrain from his usual warning that “we may need to raise the policy rate further…” Link to my prediction from last month

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This is a new post on the new dewlar.me blog.
You can find the old blog here:https://mrsdewlar.blogspot.com

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