📝Expect June Headline CPIF Rising Faster Than The Riksbank Projection: Handelsbanken

We expect headline CPIF inflation to have edged down somewhat further in June, from 6.7 percent to 6.3 percent, y-o-y, slightly higher than the Riksbank's brand new forecast. Firstly, electricity prices rose over the course of the month, making the Riksbank's estimate too low. Secondly, we expect CPIF excluding energy at 7.9 percent, marginally higher than the Riksbank's call. All told, no new alarm bells for the Riksbank in the June CPI. But while website Matpriskollen's survey suggests roughly unchanged food prices now, we stick to the forecast that price rises will return in July, a traditional price hike month in grocery stores. If we are correct about food prices and overall inflation, the Riksbank board will gather for its September policy meeting with another upward inflation revision on the table.

We stick to our forecast for two more 25bps rate hikes from the Riksbank, we see rates lifted in the September and November meetings, expect repo rate to reach a peak of 4.25%.

- Handelsbanken