WASHINGTON: Danish inflation dropped back to zero in September. It remained unchanged in the month on a year-on-year basis, down from 0.2 percent in the previous month. It came in below the consensus projection of +0.3 percent. Meanwhile, core inflation dropped to 0.3 percent year-on-year in September from 0.6 percent year-on-year in August. The lower inflation in September is expected to be for a brief period of time as diminishing effects from oil prices would begin to push inflation higher in months ahead, said Nordea Bank in a research note.
Communication prices in September fell 10.6 percent year-on-year, hence negatively contributing 0.23 percentage points to the overall consumer price index. This resulted in a solid downward pressure on services prices that were up 1.3 percent in September, the lowest rise in over 50 years.
Moreover, clothing and footwear prices were also a drag on inflation. Prices in September dropped 2.9 percent, subtracting 0.13 percentage points from the overall CPI. Diesel and petrol prices dropped about 3 percent year-on-year in September, negatively contributing 0.10 percentage points to the overall CPI. On the other hand, rents on housing and summer houses positively contributed largely to the year-on-year figure. Inflation in Denmark is expected to move higher gradually in October as the base impacts from the lower oil prices would wane, according to Nordea Bank.
