March 15, 2021
- The inflation rate according to the CPIF (CPI with fixed interest rate) was 1.5% y-o-y in February 2021, down from 1.7% in January. CPI inflation was 1.4%, some way below the consensus of 1.6%, although the outcome was only 0.1pps shy of our forecast.
- The Riksbank expects that it will be 2023 before CPIF inflation returns to the 2 per cent target on a more sustainable basis. We also see an imminent rise above 2% as fleeting.
February 19, 2021
- The minutes of the latest Riksbank Monetary Policy Meeting showed strong support for unchanged policy settings.
- Despite Sweden’s better than expected economic performance since the November meeting, there was a dovish tone to the debate, with several members showing a willingness to cut the repo rate if needed.
- Even in a scenario where the economy recovered more quickly than expected, it was felt that an inflation overshoot could help to anchor expectations more firmly around the target.
February 18, 2021
- CPIF inflation was 1.7% in January 2021, up from 0.5% in December.
- Larger than usual shifts in spending patterns during 2020 caused the basket weight of services like air travel to fall, while those of products like home electronics have risen.
- The Riksbank is likely to look through any pandemic related volatility in CPIF inflation.