By Reuters
STOCKHOLM, June 4 (Reuters) – Swedish central bank Governor Erik Thedeen said on Thursday that underlying inflation in the Nordic country is relatively low but clearly affected by a temporary reduction in value added tax (VAT) on food.
Swedish headline consumer pricespicked up sharply in May, rising by 1.5% year-on-year, preliminary data from the statistics office showed on Thursday, up from 0.8% year-on-year in April.
“Once we have more details on the outcome, we will analyse the figure further,” the Riksbank’s Thedeen said in a statement. “At the same time, the war in the Middle East is creating risks for inflation further ahead.”
In May the central bank kept rates unchanged and said that while the risk of higher inflation had increased somewhat due to the war in the Middle East, it could wait before adjusting its policy.
The Riksbank, which targets 2% inflation, will publish its next policy decision on June 17.—Reuters
