As before, the October measurement is at the upper end of the range of published forecasts. Earlier in the month, we had projected that the CPI would rise by 0.2%. The food and beverages component rose considerably more than expected, increasing by 1.0% in October, its biggest jump since May. Presumably, the depreciation has begun to affect food prices to a greater degree, as the ISK has not regained ground after weakening in late summer. Petrol prices fell slightly between months, after fluctuating markedly at the start of the year and then stabilising for a few months. Imputed rent rose more than we had estimated, another sign of the resilience of the real estate market amid historically low interest rates.
What is interesting, though, is that over the past three months, various different items have contributed most to the monthly increase. Clothing and footwear rose most in August, followed by furniture and housewares in September and food and beverages in October. Twelve-month inflation according to the CPI excluding housing measures 4.1%, which means that the housing component is still pushing inflation downwards as of October