Mixed signals for future inflation path

As the final inflation numbers for September continue to flow in, we look at the external factors that seem to be a mixed bag. The Food Price Index has increased in recent months, and the upward trend suggests inflationary pressure in the coming quarters from food items. In the region, in particular, recent flood damages may strengthen such a trend. As for the oil price development, recent levels still guarantee the negative annual growth rates of oil price that should limit the positive contribution of that item in the final inflation number. Sluggish recovery supports lower oil prices as well. As for the inflation development, we expect inflation to rise further until the end of the year due to unfavorable statistical effects and regulatory changes (mostly regarding energy prices).