Norwegian households expect short-term acceleration in inflation – BNN Bloomberg

(Bloomberg) — Norwegian households expect higher inflation next year than they expected a quarter ago, contradicting recent signs of easing price pressures in the Nordic country.

According to a quarterly survey commissioned by the central bank, households now expect consumer prices to rise by 3.1 percent in a year, compared to 2.8 percent previously. Annual inflation is estimated at 4.1 percent over the next two to three years, compared to 4.0 percent in the previous survey, according to a survey conducted by Ipsos.

The figures follow inflation data that have consistently been below Norges Bank's forecasts this year, mainly due to lower imported inflation. Still, the recent weakening of the krona is increasing uncertainty about the outlook for price developments, which was a key reason for Norges Bank policymakers to suggest last week that borrowing costs will remain at a 15-year high “for some time”.

Labor market organizations are forecasting a price increase of 3.5 percent for the next twelve months, compared to 4.1 percent in the previous quarter. For this year, they are forecasting a wage increase of 5.1 percent, compared to 5.0 percent in the previous quarter.

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