According to newly published figures from Statistics Iceland (SI), the CPI rose 0.7% month-on-month in April, raising headline inflation to 4.6%, from 4.3% in March. This is Iceland’s highest inflation rate since the beginning of 2013. Twelve-month inflation excluding housing also measured 4.6% during the month. In the recent past, the CPI excluding housing has risen more slowly than the simple CPI. House prices have therefore begun to push the index more strongly upwards than they did previously.
The April measurement is well above all official forecasts. We had projected that the CPI would rise 0.2% between months. The main difference between our forecast and SI’s measurement stems from the housing component, which rose much more than we had projected, owing to the vibrant housing market. Furthermore, food prices rose during the month, and furniture and housewares prices increased more than we had anticipated.