Denmark: Inflation recedes in October
Inflation eased to 0.1% in October, following September’s 0.9%. October’s figure represented the weakest inflation rate since May 2020. Looking at the details of the release, the moderation chiefly reflected softer price increases for food. Moreover, prices for housing and utilities fell at a steeper pace in October, and prices for transportation dropped year on year after growing in the previous month.
Accordingly, the trend pointed down, with annual average inflation coming in at 4.6% in October (September: 5.5%). Meanwhile, core inflation fell to 3.3% in October, from September’s 3.7%.
Finally, consumer prices increased a seasonally adjusted 0.26% from the previous month in October, contrasting the 0.25% drop seen in September.
October’s inflation data is welcome news; after inflation peaked in October 2022 at a nearly four-decade high, inflation was virtually zero a year later. Consumers’ purchasing power will get some breathing room, as wages are now increasing at a faster pace than inflation. This bodes well for a country in which household debt is elevated, and budgets came under intense pressure when interest rates rose steeply. Private consumption should strengthen in Q4 2023 as a result.