• Rising costs for household’s mortgages contributed 3.1 percentage points to annual inflation rate according to the CPI.
• Electricity prices were falling during July, reaching levels like those of July 2021.
• Food prices increased by 1.4 percent from June to July.
• Rising prices within the group of Recreation and Culture are playing an increasingly notable role in contributing to the aggregate inflation.
• The inflation rate calculated excluding energy products (CPIF-XE) decreased from 8.1 percent in June to 8.0 percent in July.

Lower electricity prices in July

The price development from June to July was 0.0 percent. During the corresponding period last year prices increased by 0.1 percent.

In July, electricity prices decreased by approximately 15 percent and reached price levels like those of July 2021. During the same time interest rates for household’s mortgages increased, continuing a trend started in early 2022.

From June to July prices increased for package holidays as well as for international flights. Additionally, prices increased for food and non-alcoholic beverages. Prices also increased for recreational and cultural services.

The price increases were partially offset by decreases in the prices of clothing and hotel accommodation. The annual replenishment of the national dental care subsidy contributed to lower prices for dental services in July. The price also decreased for traffic fees, due to a new method of handling congestion fees in the CPI, which now takes into consideration days that are free of charge.

The table below shows one-month percent changes and contributions to the CPI based on the goods and services that had the greatest impact on the CPI in July 2023. The results are presented by COICOP category. COICOP refers to the United Nations classification of household consumption expenditure.

Contributions to the inflation rate in July

The inflation rate according to the CPI, that is the change in the CPI from the same month of the previous year, was 9.3 percent in July 2023. This marks an unchanged rate from June, which was also 9.3 percent.

The inflation rate of July was particularly affected by the increased interest rates of household’s mortgages which contributed 3.1 percent to the total CPI. During the last year there has been increases in the prices of food and non-alcoholic beverages which also contributed to the inflation rate of July.

Hotel and restaurant visits have had price increases for the last year. Furthermore, rents and interest expenses for tenant-owned apartments have increased as well.

Broad price increases occurred for goods and services within recreation and culture, where package holidays made the largest contribution. The Recreation and culture group has become one of the main groups that affect the overall inflation rate the most. Additionally, prices have increased for transportation services, where international flights had a large contribution.

Additional contributions to the inflation rate are attributable to price increases in clothing and shoes as well as furnishings and household goods. Moreover, increased prices for miscellaneous goods and services also contributed, primarily explained by rising prices within the group personal care.

During the last year energy prices have decreased. Electricity prices have decreased by 17.6 percent compared to July 2022 whereas fuel prices have decreased by 10.7 percent.

The inflation rate according to the CPIF, which unlike CPI is not affected by changes in mortgage interest rates, was 6.4 percent in July. The corresponding rate for June was also 6.4 percent.

The inflation rate calculated excluding energy products (CPIF-XE) was 8.0 percent in July, which is a decrease compared to June when it was 8.1 percent.

Different measures of inflation

Statistics Sweden calculates different inflation measures for different purposes. The CPIF is the Riksbank’s target variable, while the CPI is the measure used for purposes of compensation. The CPIF includes the same goods and services as the CPI. The difference between the CPI and the CPIF is that the latter measure holds interest rates for household’s mortgages constant. As a consequence thereof, the effect of changed interest rates for household’s mortgages is only captured by the CPI and not the CPIF.

Additional to the CPI and the CPIF, the HICP is also calculated. The HICP is a harmonized measure of inflation used within the EU cooperation. Another index that is calculated each month is CPIF-XE (the CPIF excluding energy products) which is often used as a measure of underlying inflation.