The Riksbank’s target measure of inflation, CPIF, dropped to just 1.3% in June, almost half the level in May and the lowest level since the end of 2020. This was far below the consensus forecast of 1.6%. The large fall in services in services inflation gives us confidence in our view that the Riksbank will cut its policy rate by a further 75bps this year to 3.0%, slightly more than the market is anticipating.
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