According to figures released by Statistics Iceland (SI) yesterday morning, the consumer price index (CPI) rose 0.85% month-on-month in June, pushing twelve-month inflation down to 8.9% from 9.5% in May. It is the first time in a year that inflation has measured below 9%. Twelve-month inflation excluding housing has tapered off as well, from 8.5% to 7.9%.
The June measurement was above our forecast of a 0.7% MoM rise in the CPI. Official forecasts ranged from 0.7% to 0.9%. The main thing that took us by surprise was the unexpectedly resilient housing market, which will be a key factor in the short-term inflation outlook.