Entrepreneur inflation expectations drop: poll

The inflation expectations of Swedish entrepreneurs have fallen, the latest poll from Skop (Skandinavisk Opinion) published on Monday shows.

A total of 33.8 percent believe price increases will rise faster in Sweden in the coming year, a decrease of 2.7 percentage points from the previous poll conducted in April and May.

A total of 13.1 percent of entrepreneurs believe in a slower average rate of price increases, an increase from 9.4 percent compared with the previous poll. Every other entrepreneur believes in firm growth.

“This breaks the upward trend that has been in place since early 2008,” Skop analyst Örjan Hultåker said in a press release. “Business inflation expectations are now at the year’s lowest level.”

The percentage of entrepreneurs and business leaders believe their own company’s prices could rise faster than earlier in the year ahead remains at a low level at 16.3 percent, up 2 percentage points.

Another 11.8 percent believe their company’s prices will increase more slowly, up 2.5 percentage points. However, companies that have a high proportion of exports see things differently.

They foresee a faster pace for price increases for their own company’s products and services, as well as prices in Sweden in general, according to Skop’s press release.

More than 700 entrepreneurs and business leaders were interviewed between June 17th to July 1st.

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Swedish inflation climbs in July

Sweden's inflation rate rose at a higher clip in July than in the previous month, partly due to rising mortgage interest costs, although consumer prices remained flat.

Swedish inflation rose to 3.3 percent in July on a 12-month basis, up from 3.1 percent in June, official data showed Thursday.

Compared with June, July consumer prices were flat, Statistics Sweden (SCB) said in a statement.

It said higher prices reflected a 3.0-percent hike in interest costs for owner occupied housing, a 5.9-percent jump in prices for package holidays, as well as higher costs for fuel and food and non-alcoholic beverages.

These increases were offset by “seasonally normal price decreases for clothing and footwear, with prices falling seven percent, and lower prices for electricity, it said.

According to the European Union’s Harmonised Index of Consumer Prices (HIPC), inflation in Sweden was 1.6 percent in July compared with a year earlier, remaining well below the 2.5 percent inflation rate seen in the neighbouring eurozone last month.

Sweden’s central bank has raised its key interest rate seven times since July 2010, pushing it from 0.25 percent to 2.0 percent, in a bid to stabilise inflation close to its target of 2.0 percent.

The Riksbank has said it plans to continue raising rates on the back of Sweden’s strong economy, which is considered among Europe’s most robust with growth this year forecast at 4.4 percent.

However, economists have in recent days said they expect the bank will backtrack and leave rates unchanged at its next meeting in September due to growing fears of a new global financial crisis.