This is up from 3.3 per cent in September. The increase is 0.7 percentage points. Core inflation increased from 5.7 to 6 per cent. – This was far beyond expectations. It was a clear increase that was bigger than expected, says chief economist Harald Magnus Andreassen at Sparebank 1 Markets. – This is probably a figure that leans against Noregs Bank raising interest rates in December. There was a sharp increase in prices on a monthly basis from September to October, even if we disregard the rising electricity prices, says Magnussen. Chief Economist Harald Magnus Andreassen believes that this speaks strongly against Norway’s bBank raising interest rates in December. Photo: CF-WESENBERG – Have to tap the savings account At a grocery store at the University of Molde, Filip Ketil Hoset is early in the process. He says he knows the price increase. – Definitely. It now ends with me having to tap the savings account. I have to work a lot more. I am a student, so there will be quite a few more shifts at weekends. I would like to do other things, but I end up working, says Hoset. Filip Ketil Hoset is a student in Molde. Price increases and probably higher interest rates mean that he has to eat into his savings account, he says. Photo: Roar Jonny Strøm / news – Prestige case Chief economist at Akershus Eiendom, Kari Due-Andresen also believes that the figure for price growth in October is higher than what was expected after the September figure came out. – The inflation figure that Norges Bank manages is back on the central bank’s forecast. Now it is most likely that there will be an interest rate hike in December. There was some doubt after the September figure came out, says Due-Andresen. Andersen points out that the price increase in October is very high. She calls the current situation a test of whether inflation management is working according to the assumptions. – As long as Norges Bank has had an inflation target, for about 20 years, price growth has not been as high as it is now. So this is a prestige issue that goes beyond Norges Bank’s reputation, says the chief economist. – How does this affect the reputation of the central bank? – If the central bank does not manage to reduce price inflation now, inflation management has turned out not to be as excellent as one might have thought. And now Noregs Bank may have to be quite tough in the pinch, says Kari Due-Andresen. Kari Due-Andresen is chief economist at Akershus Eiendom. Photo: Lise Åserud / NTB – Significant change Interest rate and currency strategist Nils Kristian Knudsen at Handelsbanken also sees that it is now more likely that Norges Bank will raise interest rates in December. – This was pretty much back on track that Norges Bank envisioned in September. The change is significant, he says. Norges Bank is trying to reduce price growth to an annual growth rate of 2 per cent. Now the underlying price increase is 6 per cent, according to Statistics Norway. The aim of the jump in interest rates in the last two years is, among other things, to dampen the economy’s desire for goods and services, so that companies have to slow down price increases in order to sell goods. Before Noregs Bank has its interest rate meeting in December, one more price figure will come. In addition, they will receive an important track report from the companies in Norges Bank’s regional network. According to Knudsen, it could be decisive for whether interest rates should rise again. – The update from the regional network focuses more on the real economy and what is expected of both growth, employment, profitability and price plans going forward, says Knudsen. Nils Kristian Knudsen in Handelsbanken: – The price increase is significant. Photo: Handelsbanken Increased food prices The comparison of food prices and wage trends tells us 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 development – Kalddusj Chief Economist SpareBank 1 SR Bank, Kyrre M. Knudsen points out that the figure shows an increase in overall inflation. He points out that the level of inflation is difficult to determine precisely because energy prices vary. – This is a cold shower for us who hope that we are at the peak of interest rates. The probability of an interest rate hike in December has increased. But there is still a cooling in the Norwegian economy, and there will be more inflation figures before the next interest rate meeting at Norges Bank, he says. – Increases too fast In one of the shops in Molde, student Fredrik Ansnes is about to make the day’s purchases. He has noticed that the increase in prices has made a dent in his wallet. – I am a student and often think about the price increase. I notice it every time I shop. The prices are increasing a little too quickly, says Ansnes. Student Fredrik Ansnes: – Prices are increasing far too quickly. Photo: Roar Jonny Strøm / news Weak Norwegian krone In recent years, the Norwegian krone has weakened by around 20 per cent against the euro. The krona has also lost 25 percent against the US dollar. At the same time, several economic experts fear that the weak krone exchange rate could give us higher inflation in the future, and that this could also affect the level of Norwegian interest rates. On Wednesday this week, one euro cost NOK 12.1. This adjusted down to under NOK 12 after a few hours. Reduced price growth in September Prices also rose in September, but far less than both Norges Bank and most economic commentators had expected. The price increase was surprisingly low, and an expectation was created that the increase in interest rates has had the desired effect and that interest rate increases for the rest of 2023 became less likely. On 2 November this year, Norges Bank chose to keep the interest rate unchanged at 4.25 per cent. Central bank governor Ida Wolden Bache announced at the same time that the key interest rate would be reviewed in December. Policy rate The policy rate is Norges Bank’s most important instrument for stabilizing price growth and development in the Norwegian economy. The key interest rate in Norway is the interest that the banks receive on their deposits in Norges Bank up to a fixed amount – a quota. The key interest rate and expectations about future developments in the key interest rate primarily affect the interest rates between banks and the interest level the banks offer on deposits and loans to their customers. Market interest rates in turn affect the krone exchange rate, the prices of securities, house prices and the demand for loans, consumption and investments. Source: Norges Bank
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Prices rose by 4 percent in October shows the consumer price index cpi – news Møre og Romsdal – Local news, TV and radio
