Inflation falls below expectations in August

Swedish inflation came in below expectations in August, giving the Riksbank a reassuring reading as it assesses its next interest-rate decision. Inflation measured by the CPIF index held at 0.7%, unchanged from July, according to preliminary figures from Statistics Sweden.

Economists had expected an average rate of 0.9%, according to a Bloomberg survey. Susanne Spector, chief economist at Danske Bank, described the result as reassuring and said the figures showed no major overall impact from global supply disruptions on Swedish inflation.

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It is a reassuring inflation outcome where we still do not see any major overall effects from the global supply disruptions in Swedish inflation figures.

For the Riksbank, the controlled inflation rate makes a rate increase in September less likely. Spector said the figures instead pointed to the first increase coming later in the autumn. Inflation excluding energy prices, another measure monitored by the central bank, fell to 0.5% from 0.6% in July.

Food prices dropped 6.6% over the year, largely because of a reduction in food VAT. Clothing and footwear prices were broadly unchanged from a year earlier, while restaurant and accommodation prices rose 3.0%. The broader CPI measure increased to 0.3% in August from 0.2% in July.

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And it suggests that the first increase will come later in the autumn.