Swedish September inflation preview: Energy lifts the headline

September Swedish inflation is expected to rise sharply on energy effects, while the underlying composition remains benign and is unlikely to alter the Riksbank’s tightening path.

• Nordea expects CPIF to increase 0.8% month on month in September, with fuel prices up 14% contributing 0.35 percentage points and electricity prices up 8.3% contributing 0.29 points.
• The first reversal of temporary fuel-tax cuts is due in October, followed by a larger step in December, which should add further upward pressure to fuel prices.
• Services prices are expected to decline slightly because summer-related prices for hotels, car rentals and travel are reversing seasonally; clothing and footwear should add 0.1 point, while food prices are forecast to rise 0.6% month on month.
• Nordea forecasts September CPIF inflation at 1.4% year on year and CPIF excluding energy at 0.6%, both just below the Riksbank’s projections.
• Despite the benign composition, the Riksbank is expected to raise its policy rate by 25 basis points to 2.00% in November, with the rate peaking at 2.25% in February; a weaker SEK has led Nordea to raise its 2025 inflation forecast.

Takeaway: The September headline should look strong but mainly because of energy, so it has limited implications for the Riksbank; however, global rates, a fragile SEK and healthy GDP growth leave risks tilted toward earlier or additional hikes.