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Sweden Consumer Prices (Apr.)

The stronger-than-expected increase in Swedish inflation in April was partly due to high energy and food prices but also because of broadening price pressures. We expect the core rate to remain above the Riksbank’s target for some time, which will prompt it to continue hiking interest rates.
Michael Tran Assistant Economist
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Norway faces its own energy crisis

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Sweden Consumer Prices (Jul.)

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Nordic & Swiss Central Bank Watch

Norges Bank has further to go

The Norges Bank said in June that it was likely to raise its policy rate by 25bp at its meeting next week, but we now think it is more likely to go for a 50bp hike. Whatever it decides on interest rates, we expect it to signal strongly that further hikes will be needed in the coming months.

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European Data Response

Euro-zone Retail Sales (Mar.) & Final PMIs (Apr.)

The decrease in euro-zone retail sales in March is the first indication from official data that the war in Ukraine is weighing on consumption. With the final PMI surveys pointing to price pressures intensifying and firms remaining pessimistic, we think 2022 will be a year of stagflation for the euro-zone.

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European Data Response

Euro-zone Consumer Confidence (Apr.)

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Nordic & Swiss Data Response

Sweden Consumer Prices (Mar.)

The stronger-than-expected increase in Swedish inflation in March is likely to give more ammunition to the hawks in the Riksbank, and lends support to our view that the Bank will start to raise the repo rate and press ahead with “QT” this year.

14 April 2022
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