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Soft inflation won’t deter Riksbank or Norges Bank

According to the minutes of the Riksbank’s July meeting, Sweden’s monetary policymakers were particularly worried about the weakness of non-energy inflation. And with some justification. Data published this week showed that in June the CPIF excluding energy inflation rate fell to just 1.4%.  But with resource utilisation high and wage pressures rising, we doubt that this will deter the Riksbank from raising rates in December. Soft inflation is also unlikely to prevent the Norges Bank from hiking in September. Meanwhile, Norway’s offshore oil and gas sector had a tough first half of the year and activity in the sector is set to take a further hit from industrial action. Next week is set to be extremely quiet, with the only data release of note set to show that Switzerland’s trade surplus narrowed in June.

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