Price inflation fell sharply from July to August. Now analysts are scratching their heads ahead of new inflation figures from Statistics Norway on 11 September. – Food prices can become a joker. There is unusually high uncertainty, says chief economist Kjersti Haugland at DNB Markets. 4.25 percent policy rate will be the interest rate peak, predicts DNB Markets and chief economist Kjersti Haugland. Photo: Alf Simensen / news Because if food prices in August develop in the same way as they have so far this year, there could be another jump in inflation, according to Statistics Norway. The reason is that if food prices rise, this can lead to an increase in inflation, which in turn can have an impact on the level of interest rates. For example, that it takes longer before the interest rate is reduced. More on that further down. Outside the Extra store at Majorstua in Oslo, student Tim, who comes from Vågå in Gudbrandsdalen, notices that shopping has become more expensive. Increased food prices The comparison of food prices and the wage trend says something about whether you get more, less or the same amount for your money. When the development of food prices is higher than the development of wages, it means that food has become more expensive. Both figures are averages for the specified period. Read more about sources and reservations here. How much food prices have increased in the last year, compared to wage trends – I live in a nice collective where we share most things. But I think that single people who live alone have noticed that the mincemeat package has become more expensive, he says. From New Year’s until this summer, consumer prices have grown each month around three times as much as the central bank’s target of 2 per cent price growth a year. – The prices have probably increased steadily, says student Tim. Photo: Johan B. Sættem – I’ve seen it on the receipts after I’ve shopped, and thought oh, this was cheaper the last time I thought about the price, he says. – Very large impact on price inflation During July, price inflation fell by one full percentage point. The question now is whether this trend will continue. If so, it is good news for those who hope the central bank will soon be done with its powerful interest rate medicine. – It will be extra exciting to follow. Food is such a large proportion of the consumer price index, so it has a very large impact on overall price growth, says chief economist Kjersti Haugland at DNB Markets. She predicts that Norges Bank will raise interest rates for the last time this September. Nordea also predicts that it will now do with one more interest rate hike, in September. To Finansavisen, chief strategist Dane Cekov says that lower electricity prices, a price war on electric cars and weak consumption figures are driving inflation down. Policy rate in percent The policy rate is set eight times a year by Norges Bank. The policy interest rate governs the interest rates in the banks, and affects your housing costs. The aim of raising the interest rate is for the high prices to come down again. The forecast tells us how Norges Bank thinks interest rates will develop in the future. Read more about sources and reservations here. Higher interest rates mean increased expenses if you have a mortgage 2021 2022 2023 2024 2025 2026 Forecast Norges bank But a big question is what will happen to the price development of groceries this autumn. The grocery chains have so far this year departed from a more than ten-year-long practice of changing prices mainly only twice a year. The food chain Rema said this summer that the food chain is moving away from the practice. Central Bank Governor Ida Wolden Bache is now paying extra close attention. Central bank governor Ida Wolden Bache and the monetary policy committee at Norges Bank are keeping a close eye on food prices. Photo: Ismail Burak Akkan / news – Food prices have risen a lot in the past year. Previously, these price changes came twice a year, in February and July. Now it has been more evenly spread out. This creates some uncertainty about the course of food prices from month to month, says the governor of the central bank. She says that Norges Bank expects that the rise in food prices will gradually decrease. The quote is taken from an interview that news did with Wolden Bache in connection with the publication of the latest interest rate change on 17 August. The central bank does not give interviews after the work on the next interest rate decision has started, which is normally 2-3 weeks before the interest rate meetings. Uncertain price growth in August Consumer prices normally fall during August. But if the price of food follows the same trend as they have done so far this year, it is not certain that will happen now, says Espen Kristiansen, who is head of the Consumer Price Index at Statistics Norway. The question then becomes what does this mean for future interest rate developments. – Food prices have increased steadily every month. If it also happens in August, i.e. that prices go up from July to August, then you will get an increase in inflation measured by the 12-month rate in the consumer price index, says Espen Kristiansen. Interest calculator The calculator uses the formula for annuity loans to calculate your monthly costs. Nominal interest is used here. This means that there will be an additional transaction fee which will vary from bank to bank. Today’s interest rate is taken from DNB’s mortgage interest rate for young people, and different banks will have different interest rates. The figures given here will therefore be approximate for you. Monthly expenses are interest and repayments combined. Read more about sources and reservations here. See how much you have to pay if the interest rate increases.
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Food prices can become interest rate jokers – news Norway – Overview of news from different parts of the country
