Norwegian Inflation Accelerates In December

Norway’s consumer price inflation accelerated further in December on higher energy prices, data from Statistics Norway showed on Monday.

Consumer price inflation rose to 5.3 percent in December from 5.1 percent in November.

The annual inflation was driven by the 15.9 percent increase in housing, water, electricity, gas and other fuel prices. Transport prices were up 5.2 percent, while food and non-alcoholic beverages prices dropped 1.9 percent and clothing and footwear prices dropped 1.2 percent.

Core inflation advanced to 1.8 percent from 1.3 percent in the previous month. The rate was forecast to rise marginally to 1.4 percent.

On a monthly basis, overall consumer prices gained 0.7 percent and core prices grew 0.4 percent in December.

At the same time, EU harmonized inflation advanced to 6.1 percent annually from 5.8 percent in November.

Another report from the statistical office showed that producer price inflation surged to 68.7 percent in December from 58.6 percent in the previous month. Month-on-month, producer prices moved up 8.1 percent after climbing 3 percent in November.

While Norwegian policymakers do not have as laser-like a focus on consumer price inflation as most, the increase in the core rate in Norway in December only lends support to the hawkish view that the Norges Bank will raise interest rates more aggressively than investors expect this year, David Oxley, an economist at Capital Economics, said.