OSLO, Oct 10 (Reuters) - Norway's core inflation slowed in September but came a touch above expectations while headline inflation was in line with forecasts, data showed on Wednesday.
The consumer price index (CPI) excluding volatile energy prices rose 1.1 percent year-on-year, while analysts had forecast a rise of 1.0 percent.
Headline inflation meanwhile came to an annualised 0.5 percent, meeting expectations.
Producer prices rose 1.4 percent year-on-year, slowing from 4.4 percent growth in August. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ NORWAY CONSUMER PRICES (pct) Sept 2012 Aug 2012 Sept 2011 Core CPI year/year 1.1 1.2 1.2 Core CPI month/month 1.1 -0.7 1.2 Headline CPI year/year 0.5 0.5 1.6 Headline CPI month/month 0.9 -0.4 0.9 Index (base 1998) 131.2 130.0 130.6 NORWAY PRODUCER PRICES Sept 2012 Aug 2012 Sept 2011 Figures (percent) Year-on-year change 1.4 4.4 15.3 Month-on-month change -1.1 2.3 1.8 Index (base 2000) 243.5 246.1 240.1
MARKET REACTION The Norwegian crown
stood at 7.3800 against the euro after inflation and PPI data at 0818 GMT, unchanged from before the data.
KJERSTI HAUGLAND, SENIOR ECONOMIST, DNB MARKETS
"Core inflation was slightly higher than expected.
"It is still below Norges Bank's projection, but the gap has narrowed compared to the August number where Norges Bank's estimate was a sure miss on the upside.
"The distance to Norges Bank's rate path is now smaller compared to August. That means that a lower inflation than expected will have less of an influence on the bank's rate path which they present later in October, as this is a factor that will contribute to lowering the rate path, seen in isolation.
"We maintain our forecast that Norges Bank will wait until October next year to hike rates.
ERIK BRUCE, CHIEF ANALYST, NORDEA MARKETS
"It was a little higher than both consensus and we had been expected, at 1.1 percent, and inflation was slightly higher than we had expected.
"Now the inflation is two tenths below Norges Bank's expectations. It is still slightly below the bank's projections, but not as much as expected.
"Inflation will still be one of the things that would indicate a slightly lower interest rate path, but it won't have a huge impact and I still do not believe in a rate cut.
"Slightly lower inflation and a slightly weaker crown suggests a slightly later rate increase, but the money market has declined a lot, so the way it looks now, there will not be any major changes in the interest rate path that is published at the end of the month."
IDA WOLDEN BACHE, MACRO ECONOMIST AT HANDELSBANKEN
"Core inflation was a little higher than expected, but not dramatically.
"The rise in prices for food and clothes was as expected.
"Inflation is still below Norges Bank's estimate and low inflation will in isolation suggest a lower rate path in October, but today's numbers are not strengthening such an argument further.
"We expect the first hike in March 2013 and we will not make any changes based on these figures.
(Reporting by Oslo newsroom) ((+47 2293 6977)) Keywords: NORWAY CPI/