Record high price jump for food – NRK Norway – Overview of news from different parts of the country

Juli is with February the month of the year when the chains have the opportunity to regulate grocery prices. This happens after negotiations with the suppliers.

I February the figures showed the strongest price increase in over 40 years. Also in June increased prices unusually much.

Statistics Norway’s figures for July now show another sharp price jump in food prices. The price of food and drink has increased by 10.4 per cent in the past year. In comparison, consumer prices have increased by 6.8 per cent.

– A historically high price increase for food and non-alcoholic beverages in July was clearly the most important reason for the rise in the consumer price index in July. We have never previously measured a similar price increase for food from one month to another in the CPI, says section manager Espen Kristiansen at Statistics Norway.

For a family of four with a sober food budget of NOK 11,000 a month, this means that expenses for food and drink now cost NOK 1,100 more than a year ago.

Eats up wage growth

Although the price of fuel decreased slightly during July, prices are still 50 percent higher than a year ago.

At the same time, the spring wage settlement ended at 3.7 per cent. It is far from enough to cover the increase in prices. As a result, most people get worse advice.

– The strong rise in prices eats up wage growth and rightly so, so the wage bill is shorter and purchasing power decreases, says Kristiansen in Statistics Norway.

This is what today’s figures show new record jump in the prices of food and drink.

The biggest price change for food and drink during a month was July 1981, when prices increased by 5.3 per cent.

The series of figures examined goes back to 1979. Statistics Norway states that the agency has looked at figures as far back as 1960, and has never seen similar price growth for foodstuffs.

Price increases on packaging, energy, transport, target prices and increased production costs have found their way via the suppliers to Norwegian shop shelves.

Photo: Simon Skjelvik Brandseth / NRK

Could get a double interest rate jump next week

In June, Norges Bank raised the key interest rate by 0.5 percentage points, for the first time in 20 years.

The question many are now asking is whether we will get another double interest rate jump from the central bank as early as next week.

– The figures are much higher than Norges Bank expected. Dthis means that Norges Bank will probably increase interest rates by 0.50% as early as next week, writes Nordea’s chief economist Kjetil Olsen in an update.

Handelsbanken Markets writes that the price increase was far stronger than what was expected by the market players.

– Inflation far above Norges Bank’s forecasts, we expect another doubling next week, the brokerage house writes.

In Norges Bank monetary policy report from June, the central bank estimated that the so-called core inflation in July would rise by 3.2 per cent. Core inflation is the growth in consumer prices adjusted for changes in tax levels and energy prices.

A stronger price increase than this, in isolation, will pull in the direction of a higher interest rate than what Norges Bank signaled at the June meeting.

And Statistics Norway’s figures show that price growth is far above what the central bank has assumed. During July, core inflation increased by 4.5 per cent, measured by the CPI.

Then the central bank said that the interest rate was most likely would be further set up by 0.25 percentage points in August.

Kjetil Olsen, chief economist Nordea

– We will look for signs of whether inflation is picking up, says Kjetil Olsen, chief economist at Nordea.

Photo: Ketil Kern / NRK

Ahead of the inflation figures, Nordea’s economists thought the most likely thing was that the central bank would keep the interest rate plan from June, since it is a so-called intermediate meeting and a new economic analysis of the Norwegian economy (monetary policy report) will not be published.

– It depends somewhat on what the numbers show. But normally one monthly figure is a bit too small to jump in the chair, says Olsen.

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