Swedish Inflation Report Gives Backing to Riksbank Rate Shift

(Bloomberg) -- Swedish inflation was faster than estimated in June, providing backing for the central bank’s call earlier this month to drop its so-called easing bias.

Headline consumer prices rose an annual 1.7 percent in June, unchanged from May, Statistics Sweden said Thursday. Analysts surveyed by Bloomberg had estimated a rate of 1.6 percent. Underlying prices rose an annual 1.9 percent, also faster than predicted.

The reports support the central bank’s move earlier this month to raise its forecast for rates, eliminating the chance of a cut in the near term. Policy makers have been in an all-out battle to boost inflation over the past three years, cutting rates deep below zero and pumping money into the economy through government bond purchases.

Both headline and underlying consumer prices rose 0.1 percent in the month. Price increases were driven by costs for package holidays, international flights as well as banking services, the statistics agency said.

To contact the reporter on this story: Jonas Bergman in Oslo at jbergman@bloomberg.net.

To contact the editors responsible for this story: Jonas Bergman at jbergman@bloomberg.net, Tasneem Hanfi Brögger