Price growth, Interest | Statistics Norway: – Positive for your wallet and mine

The consumer price index (CPI) rose 3.6 per cent from April last year to April this year.

It is 0.3 percentage points lower than the twelve-month growth in March, according to recent figures from Statistics Norway (SSB).

The increase of 3.6 per cent is the lowest twelve-month growth measured in April since 2021, when it stood at 3 per cent.

– Price growth decreased for the fourth month in a row in April. Prices are still higher than they were at the same time last year for most goods and services, but they are generally rising more slowly than before, says section manager Espen Kristiansen at Statistics Norway.

– Do not believe in interest rate cuts

Among the product groups that contributed significantly to the further decline in price growth in April, we find electricity.

– Price growth is lower than what Norges Bank expected at 3.9 per cent, so this is positive for your and my wallet, says senior strategist Dane Cekov at Nordea Markets to Nettavisen.

In that, Cekov adds that we can expect marked real wage growth this year, meaning that wages will rise significantly more than prices.

As you know, the Frontfag settlement ended with a salary increase of 5.2 percent.

– However, we do not think there will be any interest rate cut in 2024, he adds.

Sugar shock

– The prices of electricity, including online rent, fell by 0.7 per cent in the last month, which is well below the price increase we saw from March to April last year, when prices went up by 5.1 per cent, says Kristiansen.

The biggest price increase from March to April was for books, which rose by 13.2 per cent, followed by coffee, tea and cocoa and jams, honey, chocolate and confectionery which rose by 9.5 and 7.7 per cent respectively. The biggest decline was the price of games, toys and hobby products, which fell by 2.1 per cent.

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Bread and petrol prices help to keep interest rates high

Chief economist Kyrre M. Knudsen at SpareBank 1 SR-Bank, in contrast to Cekov, describes today’s news as a “proper downturn”.

– We had expected inflation to decrease more. It is moving in the right direction, but it is moving at a mouse’s pace, where we would have needed some long steps. -Norges Bank has already said that the interest rate peak will last for quite some time. It is now unlikely that interest rates will be cut in September.

– The krone will strengthen

Knudsen reminds us that there are three more inflation figures before the interest rate meeting

– This will probably result in a slightly stronger krone. If inflation is higher than expected, the krone normally strengthens. It is a small consolation on an otherwise gray macro day.