NORWAY: January CPI-ATE Sees Broad-based Strength, Rents and Insurance Noted

The January acceleration in Norwegian CPI-ATE inflation looks broad-based, with start-of-year price resets in the likes of rents and insurance highlighted. There may be scope for some payback in February owing to a significant acceleration in airfares, but that won’t be enough to ease Norges Bank concerns around inflation persistence.  On a seasonally adjusted basis using Statistics Norway data, CPI-ATE rose 0.49% M/M in January, the highest sequential reading since February 2025. That pulled 3m/3m inflation momentum up to 3.22% (vs 3.09% prior), a 9-month high. 

• Statistics Norway notes that “It was particularly the development in rents and the prices of cars and electricity that lifted price inflation in January. The growth was nevertheless quite broad-based, with few goods and service groups where prices decreased. “
• Rent inflation was 3.86% Y/Y (vs 3.57% prior). As expected, rents now have a larger weight in the inflation basket, exacerbating their role in  keeping CPI-ATE elevated.
• Services ex-rent inflation rose to 4.42% Y/Y (vs 4.02% prior), despite a base effect driven fall in services where labour dominates (0.00% Y/Y vs 0.61% prior). Insurance and financial services inflation was 8.45% Y/Y (vs 7.85% prior), while restaurants and hotels was 5.85% Y/Y (vs 5.11% prior). Note the volatile airfare categories saw annual inflation of 11.2% Y/Y, which may see some payback in February.
• Domestic goods inflation eased to 3.67% Y/Y (vs 3.94% prior) while imported inflation was steady at 1.73% Y/Y (vs 1.72% prior). There was a welcomed pullback in food and non-alcoholic beverages to 4.23% Y/Y (vs 5.92% prior), offset by accelerations in clothing and footwear and furniture and household equipment.
• Headline inflation was pushed higher by an expected increase in the EV VAT rate,  alongside a rise in electricity prices. However, these do not filter into CPI-ATE (which excludes tax changes and energy).