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Erik Johannes Bruce, Reseach Analyst at Nordea Markets, expects Norway’s core inflation to remain on the upside to Norges Bank again in October, which argues for a higher path in December, but growth and especially labour markets will be more important.

Key Quotes

“Core inflation remained at 1.9% in September after the surprise rise in August. Norges Bank had expected a correction down and hence core inflation ended 0.3% point above Norges Bank’s forecast. The October figure is out on the 9th of November.”

“We expect the October core inflation unchanged at 1.9%. That means the gap to Norges Bank will remain 0.3% points. Consensus is 1.8%.”

“If we are right, inflation will end up above Norges Bank and enough to give a positive contribution to the rate path. Still, current inflation is not a main driver for changes in the path and probably less so when we are that close to the target anyway.”