Higher oil prices will provide a boost to energy inflation in most countries over the coming months, including in Switzerland and the Nordics. In Sweden and Norway, the energy component will be additionally boosted by a spike in electricity price inflation in the near term, which is the flip side of the weather-related plunge in electricity prices last year. Futures prices in both countries are currently about double their level a year ago and are more than four times higher than the trough reached in March in Norway. Partly as a result, headline inflation in Sweden is set to rise above its 2% target for the first time almost two years during Q1.
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