Swedish Inflation Surge: A Cold Shower for Economists

Inflation rose more than expected in June, reaching 2.9% according to the KPIF. The announcement was surprising, says Frida Bratt, savings economist at Nordnet.

– It's a bit of a cold shower, absolutely.

On Monday, SCB released its preliminary inflation figure for June, reporting that inflation had risen to 2.9% from 2.3% in May.

Next week, the official inflation announcement will likely clarify why inflation increased so much in one month.

– It could be higher flight prices and other seasonal factors, but we don't really know yet, says Frida Bratt at Nordnet.

Christina Sahlberg, savings economist at Compricer, however, suggests that the announcement should be taken calmly.

– When inflation swings like this, there's no reason to worry, because inflation always fluctuates up and down. It's when it happens several months in a row that it actually has a significant impact, she says.

How It Affects You

The shocking announcement could mean that the Riksbank must reconsider potential interest rate cuts later this year. In connection with the latest interest rate announcement, when the rate was cut, it was said that another cut later this year was likely.

– This puts the Riksbank in a tricky position. Lowering the rate risks fueling inflation. It's absolutely uncertain if there will be more cuts this year, says Frida Bratt.