Ruled out interest rate cut after inflation figures – Private Businesses

Consumer prices rose by 0.3 percent in May from the previous month, according to Statistics Sweden. CPI inflation was 0.1 percent.

According to the SME Direkt survey expected analysts that consumer prices would have risen by 0.2 percent on a monthly basis and decreased by 0.1 percent compared with the same month in 2014.

The Riksbank’s forecast path, published April 29, pointed to a CPI inflation rate of 0.0 percent in May.

The interest rate is not up to date

The fact that inflation is now surprised on the upside is good news for the Riksbank as persistently tried to get up inflation. With today’s announcement reduces the likelihood dramatically for a rate cut.

“The probability that the Riksbank cut the repo rate in July has decreased markedly after today’s CPI figures. Swedbank now believe the repo rate will be left unchanged in July. But the Riksbank remains dovish and may act if the krona appreciates too much, “writes Swedbank in a statement.

Handelsbanken is on the same track.

” Given an inflation rate above the Riksbank’s forecast path believe we are no longer the Riksbank to cut rates at the July meeting. We thought before on a cut of 10 basis points, “writes Handelsbanken analyst Pierre Carlsson .

Nordea’s Chief Analyst Torbjorn Isaksson writes that while it weighs quite evenly, but that now they change their prognosis and no longer believe a rate cut in July.

He points out the crown as crucial for the Riksbank to come. The crown was already stronger than the Riksbank’s forecast prior to the CPI and strengthened even more by the statistics.

“Therefore, our immediate vision that the Riksbank will take further measures later this year to ensure the rise in inflation,” wrote Torbjorn Isaksson .