RPT-🇳🇴Cable FX Macro Weekly Note: Norway June Consumer Prices

**As seen in Risk In The Week report 07/09/23, subscribe at cablefxm.co.uk/reports

Headline Norway consumer prices re-accelerated in May to 6.7% Y/y from a prior 6.4%, the figure came to beat the consensus median of 6.3%. Underlying CPI-ATE jumped to a fresh record high of 6.7% Y/y from the prior 6.3%, this was above expectations of a 6.3%. On a monthly basis, underlying prices eased to 0.7% M/m from a prior 1.0%, food prices rose by 2.3% vs a prior 2.5%, clothing came in at 2.1% vs a prior 1.0%, household prices fell by 1.2% from a prior rise of 1.5%. The record high print in core inflation came to support the case for further rate hikes from the Norges Bank, a recent survey compiled by Bloomberg showed economists’ expectations for a 3.75% policy rate by end of the year, this has been delivered in June as the central bank hiked rates by 50bps. The Norges Bank noted that the depreciation of the krone combined with a strong domestic economy is likely to keep underlying inflation supported and to moderate slowly. The central bank now expects CPI-ATE at 6.3% in 2023 and at 4.6% in 2023, these projections were revised higher from its previous forecast. Analysts at SEB pointed at some easing in upward prices pressures, however, they expect food prices to continue to rise fast over the next 3–4 months, they added that this component was the most important driver for a rising CPI- ATE over the last quarter. SEB sees June CPI-ATE rising by 6.4% Y/y and 0.5% M/m.