Swedish inflation in double digits as food prices soar

Sweden’s price increases tempered slightly in January but inflation remained in the double digits at 11.7 per cent as food prices continued to soar despite lower energy costs.

The consumer price index (CPI) came down from a three-decade record high of 12.3 per cent in December, Statistics Sweden said.

“Electricity prices decreased by 27.4 per cent in the last month which also contributed to an easing in the inflation rate from December to January,” Sofie Ohman at Statistics Sweden said.

At the same time, food prices were up 20.4 per cent compared to a year earlier, while increased interest rates for household mortgages contributed 2.5 per centage points to the annual

inflation rate.

Sweden’s inflation adjusted for fixed interest rates (CPIF) -- the figure used by Sweden’s central bank to guide monetary policy -- was 9.3 per cent in January, down from 10.2 in December.

In a bid to counter soaring inflation, the Scandinavian country’s central bank has sharply hiked its key interest rate in recent months, from zero in April 2022 to 3.0 per cent currently, and it has signalled more increases are on the way.

Inflation has soared worldwide in the wake of Russia’s invasion of Ukraine in February 2022, prompting central banks to hike interest rates.