Swedish CPIF inflation up 9.4% yr/yr in Feb, underlying inflation soars

STOCKHOLM (Reuters) – Consumer prices in Sweden, measured with a fixed interest rate, rose 0.9 percent in February from the previous month and were up 9.4 percent from the same month last year, the statistics office (SCB) said on Wednesday.

Headline inflation was in line with the Riksbanks forecast. More worryingly for the central bank, underlying inflation – which strips out volatile energy prices – jumped to 9.3% year-on-year, up from 8.7% in the previous month.

The Riksbank had forecast underlying inflation of 8.0%.

Analysts in a Reuters poll forecast headline inflation of 9.2% compared to a year earlier, with underlying inflation of 8.7%.

At its February meeting, the Riksbank raised the policy rate by a half percentage point to 3% and said it expected to tighten by a further 25 or 50 basis points in April.

The central bank targets 2 percent CPIF inflation.

(Reporting by Simon Johnson; editing by Niklas Pollard)