The reaction on the currency market follows a period where the krona has gradually lost height – in line with the increasing expectations of interest rate cuts from the Swedish Central Bank in the near future.
Inflation in the euro countries increased to 2.0 percent in October, according to a preliminary calculation from the statistics agency Eurostat. This is precisely on the inflation target that the European Central Bank (ECB) has, and it can be compared to 1.7 percent in September.
Energy prices are not falling as much
The inflation increase was greater than expected. Analysts had on average counted on the inflation increasing – but only to 1.9 percent, according to a compilation of forecasts made by Bloomberg.
Service prices are pulling upwards, with increases in annual rate of 3.9 percent in October according to Eurostat's preliminary figures. This is the same rate of increase as in September.
For food, alcohol, and tobacco, the price increases were 2.9 percent in October, compared to 2.4 percent in September.
The most important explanation for the increasing inflation pressure in the eurozone is that energy prices are not falling as much anymore. They fell 4.1 percent in annual rate in October, compared to the fall of 6.1 percent in September.
The so-called core inflation in the eurozone, where, among other things, energy prices have been excluded, remained stable at 2.7 percent in October – the same level as in September.
The inflation figures come after the GDP statistics from the euro countries surprised positively earlier in the week, including in Germany. Germany has also presented unexpectedly high inflation figures for October at 2.4 percent – up from 1.8 percent in September.
The expectations of a so-called double cut of 0.50 percentage points of the ECB's key interest rate at the next meeting in December have already cooled down after this.
Swedish unemployment stands out
Unemployment in the euro countries was unchanged at 6.3 percent in September compared to the previous month, according to a separate report from Eurostat.
For the entire EU, unemployment was 5.9 percent in September, also unchanged compared to August.
The Swedish unemployment rate in September was, according to Eurostat, 8.5 percent, unchanged compared to August. This is the third highest unemployment rate in the EU in September, after Spain at 11.2 percent and Greece at 9.2 percent.
