According to newly published figures from Statistics Iceland (SI), the CPI rose 0.59% month-on-month in October, raising twelve-month inflation from 4.4% in September to 4.5%. The CPI excluding housing rose by 0.47% during the month, however, and twelve-month inflation thus measured was 3.0%. The numbers show both that there is a significant difference between inflation with and without the housing component, and that inflationary pressures are rather widespread at present.
The October measurement is at the upper end of official forecasts. We had projected a rise of 0.5% between months, whereas forecasts as a whole lay in the 0.5-0.6% range. The difference between our forecast and SI’s measurement lies mainly in the housing component – both imputed rent and home maintenance – and the furniture and housewares component, both of which rose more than we had projected. On the other hand, airfares fell markedly month-on-month, contrary to our expectations.