Small rise in inflation in May

Consumer prices in Sweden rose by 0.2 percent in May, according to new figures from Statistics Sweden. Inflation was 1.2 percent, compared with 1 percent in April.

The inflation rate measures the average change in consumer prices over the past twelve months. Market interest rates rose somewhat and the krona strengthened against both the euro and the dollar following the release of the inflation report.

Both the rise in consumer prices and the inflation rate were slightly higher than expected. Analysts had on average expected consumer prices to rise 0.1 percent, while inflation was expected to be 1.1 percent, according to a Reuters survey.

The higher consumer prices were mainly due to greater interest costs and more expensive clothes and shoes. Higher rents and the increased price of dairy products also contributed to the rise.

“Inflation figures were roughly what we expected. We knew that higher mortgage interest rates and the higher prices of clothes and shoes would push consumer prices up a bit,” said Tor Borg, analyst at state mortgage lender SBAB.

“The figures won’t affect the Riksbank’s [interest rate] decision. There will be a rise of 0.25 points in July, and that is due to all the recent good news on growth,” Borg said.

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