Norway’s underlying inflation unexpectedly accelerated to a record-high pace, vindicating the central bank’s half-point interest-rate increase last month and setting the stage for another hike in August.
Core inflation, the measure followed by Norges Bank, accelerated to 7.0% in June from a year earlier, compared with the 6.6% forecast by analysts in a Bloomberg survey and a central bank estimate of 6.6%. Headline inflation slowed less than forecast to 6.4%.
The data from Statistics Norway will likely boost bets that Norges Bank will be forced to extend a string of increases in borrowing costs. Norway’s inflation record comes about half a year after price gains peaked across developed economies. The krone is the second-worst performing currency in Group-of-10 currencies this year.
Food and non-alcoholic drink prices jumped about 13% over the past 12 months, while transport costs rose 4.6%, the statistics office said. Recreation and culture prices rose 9.1%.
--With assistance from Joel Rinneby and Ainhoa Goyeneche.
