Swedish October inflation preview: A quiet month

Swedish inflation is likely to remain subdued in October, but robust growth and rising resource utilization should lead the Riksbank to continue hiking rates.

• Nordea expects CPIF inflation to increase 0.3% month on month in October, putting annual inflation at 1.4% year on year.
• CPIF inflation excluding energy is forecast to remain stable at 0.5% year on year, below the Riksbank’s forecast.
• The Riksbank is expected to raise rates on 4 November, with the policy rate peaking at 2.25% in February next year as GDP growth and resource utilization remain strong.
• Electricity prices declined nationally in October, while fuel prices rose because of higher global oil prices and the first reversal of fuel-tax cuts; the larger tax change is scheduled for December.
• Goods prices are expected to rise, partly reflecting higher electronic-component costs linked to the global AI boom and seasonal pre-Black Friday pricing, while food and services inflation remain moderate.

Takeaway: October inflation should be a quiet release with balanced risks, but the expected rate hike and further tightening reflect the Riksbank’s confidence that core inflation will increase ahead.