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Sweden’s September headline inflation reached 2.5%, higher than consensus expectations of 2.3% and up from 2.2% in August, notes Jonas Goltermann, Developed Market Economist at ING.

Key Quotes

“More importantly, the core measure increased to 1.6% from 1.2%. Some of the upside surprise is down to higher food prices caused by the extremely hot and dry summer, which are temporary in nature. But service price inflation jumped to 2%, which suggests the upturn could prove durable.”

“While wage growth remains subdued, the effect of a weaker krona is starting to feed through to prices and this should support inflation over coming months.”