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What does Sweden’s increasing inflation rate mean for you?

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Sweden’s inflation rates rose to 3.1 percent in October compared with 2.8 percent in September, according to the CPIF (Consumer Price Index with fixed interest) measurement.

The CPIF measurement, which is that used by the Swedish Central Bank, subtracts the effects from changes to mortgage rates from the CPI (Consumer Price Index) measurement.

Excluding the effect of rising energy prices on inflation, CPIF inflation in October stood at 1.8 percent, compared with 1.5 percent in September.

But how will this affect you?

What does higher inflation mean?

Inflation means that the price of goods is increasing. It can become an issue if wages don’t rise at the same speed, as salaries have to stretch further. This leads to the real value of wages decreasing, so consumers end up with less money in their wallets.

What does this mean for foreigners in Sweden?

Andreas Wallström, Swedbank’s head of forecasting and deputy head of macro research, believes that those living in Sweden who are employed by a Swedish company will “most likely” be affected by rising inflation rates “to the same extent as Swedes”.

“I can’t see that foreigners living in Sweden would have particularly different consumption habits to average Swedes, they most likely have a home where they’re paying for rising energy prices, probably also – to the same extent as Swedes – transport prices, rising fuel costs,” he told The Local. Their Swedish salaries would also most likely rise in line with Swedish inflation rates.

However, those living in Sweden who are receiving their income from another country may notice a difference.

“If you have high inflation in one country, but income in another country, where inflation isn’t so high, you might lose purchasing power, that is to say that your true income would actually decrease,” said Wallström.

Those working for employers in other European countries will probably be unaffected, but those earning in US dollars, for example, could notice a difference.

“If you look at Europe at the moment, the way in which the inflation rate is developing looks similar in a lot of countries – more or less in Europe, on average, inflation this autumn is at around 3 percent, which is the same as in Sweden. The USA is sticking out, though, where it’s noticeably higher, more than twice as high than here in Sweden,” Wallström continued.

Could this result in a stronger Swedish krona? Photo: Sofia Sabel/imagebank.sweden.se

What could the knock-on effects of this be?

Rising inflation levels, if they continue, could also result in the Swedish krona’s value increasing.

“If inflation stays high, then the Swedish Central Bank might tighten up their monetary policy a little bit faster than the ECB [European Central Bank] will in Europe, for example. Then that could be a reason for the krona increasing in value slightly in the future, which could benefit people living abroad with their income in Swedish kronor,” explained Wallström. Conversely, this could be bad news for those living in Sweden and earning in other currencies, as their salary, when converted into Swedish kronor, would be worth less.

This could be good news for companies working with imports, on the other hand, although Wallström warns not to get too excited about this: “If the krona gets stronger, then it would absolutely be good news for import companies. That said, though, there aren’t many right now who think the krona is going to get much stronger – most analysts, including us, think that the krona will get a little bit stronger, but not a lot. We don’t really think that the Swedish Central Bank will raise interest rates much more than the ECB will, rather they’ll stay low.”

Should I be worried about rising inflation rates?

Probably not, thinks Wallström, unless inflation in the USA starts to affect Sweden.

“I don’t think so, at least not in Europe generally – I think maybe what’s happening with inflation in the USA sticks out as more worrying, and I think it could be more long-term. And the effect which that could have on Sweden is that if American inflation stays high, then maybe the American Central Bank could raise interest rates earlier, and by more than expected – which could lead to higher interest rates globally, which could lead to higher interest rates in Sweden, which could weaken house prices in the future.”

High energy prices are one reason for the recent rise in inflation rates. Photo: Janerik Henriksson/TT

What is causing it?

Wallström believes there’s a good explanation for current high inflation rates, especially when comparing the rates year-on-year – energy prices. But they won’t cause inflation to keep rising as long as they stay high but don’t increase further.

“Around half of inflation is energy prices, and what we know is, even if electricity and fuel prices in spring are still high, inflation is the difference in energy prices from one year to the next, so high electricity prices won’t contribute that much to inflation in the future, even if they’re still high,” he explained.

This also means that if fuel and energy prices decrease next year, we could see inflation rates fall again.

“We can’t rule out the fact that energy prices could even decrease somewhat, economic growth could slow down somewhat, and then we could end up seeing inflation fall because of energy prices. Energy prices are often very volatile,” Wallström said.

He added that it was a good sign that it was mainly energy prices which were increasing year-on-year, “so as long as we don’t get a very wide spread of inflation – that a lot of goods and services see rising prices, which I don’t see many signs of in Sweden or Europe in general”.

In the past month, other goods and services that have seen a price increase include food and drinks, and cultural services and goods such as package holidays, tickets to sports and cultural events, and ski equipment, according to a report from Statistics Sweden, which suggests that these price increases may be due to the easing of pandemic restrictions.

“We noted a broad price increase on recreational and cultural services such as sports competitions, cinemas, theatres and admission fees to dance clubs. This development may be related to eased restrictions,” said Sofie Öhman, statistician at Statistics Sweden, in a statement.



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Census 2022 – what difference does it make?

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Next Sunday, April 3rd, is Census night. Millions of people in homes countrywide will fill in page after page of questions, some of which are deeply personal and many of which might be unfamiliar.

But what it is it all about?

At a basic level, Census 2022 will be used to inform planning of public policy and services in the years ahead, according to the Central Statistics Office.

The questions will cover a range of environmental, employment and lifestyle issues, including the use of renewable energy sources in homes.

The questions will help inform policy development in the areas of energy and climate action, and the prevalence of internet access, to understand the availability of and need for internet connections and range of devices used to access the internet.

Questions also focus on changes in work patterns and will include the trend of working from home and childcare issues, while questions are also asked about the times individuals usually leave work, education or childcare, to help identify and plan for transport pattern needs locally and nationally.

Other topics covered include volunteering and the type of organisations volunteers choose to support, tobacco usage and the prevalence of smoke alarms in the home.

And of course there is a time capsule – the chance to write something which will be sealed for the next 100 years.

In this episode of In The News, the head of census administration Eileen Murphy and statistician Kevin Cunningham about what it all means for us.

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Oscars 2022: Will Smith makes Oscar history after slapping Chris Rock over joke about wife Jada Pinkett Smith | Culture

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Will Smith took the Oscar for Best Actor at last night’s 94th Academy Awards, but he also became the protagonist of the ceremony for other reasons. The night was following the script, until Smith slapped comedian Chris Rock on the stage after the latter made a joke about the shaved head of the former’s wife, Jada Pinkett Smith. Rock had quipped that he was “looking forward to GI Jane 2,” in reference to her look. Pinkett Smith has revealed publicly that she has alopecia. It looked as if the moment had been planned, until Smith went back to his seat and shouted: “Get my wife’s name out of your fucking mouth.”

The moment, which immediately became Oscar history but for all the wrong reasons, left the attendees with frozen smiles, and asking themselves whether it was possible that a veteran such as Smith could have lost his cool in front of tens of millions of people. After taking the prize for Best Actor, the superstar actor made a tearful apology, saying that he hoped the Academy “will invite me back.” Later on, actor Anthony Hopkins called for “peace and love,” but it was already too late. The incident overshadowed the success of CODA, which took the Oscar for Best Picture. Just like the time when Warren Beatty mistakenly named La La Land as the big winner of the night, no one will speak about anything else from last night’s awards.

At first sight, Smith’s actions looked as if they were scripted. When he first heard Rock’s joke, he laughed. But his wife was seen on camera rolling her eyes, and it was then that the actor got up onto the stage and hit Rock. When he returned to his seat he raised his voice twice to shout “Get my wife’s name out of your fucking mouth,” sending a wave of unease and shock through the attending audience. The fact that he used the f-word, which is prohibited on US television, set alarm bells ringing that this was real and not a planned moment. In fact, the curse word was censored by the broadcaster, ABC, in the United States.

During a break, Smith’s PR manager approached him to speak. In the press room, which the actor skipped after collecting his prize, instructions were given to the journalists not to ask questions about the incident, Luis Pablo Beauregard reports. The next presenter, Sean “Diddy” Combs, tried to calm the situation. “Will and Chris, we’re going to solve this – but right now we’re moving on with love,” the rapper said.

When Smith took to the stage to collect his Best Actor award for his role as Richard Williams – the father of tennis stars Venus and Serena – in King Richard, he referred to the character as “a fierce defender of his family.” He continued: “I’m being called on in my life to love people and to protect people and to be a river to my people. I know to do what we do you’ve got to be able to take abuse, and have people talk crazy about you and have people disrespecting you and you’ve got to smile and pretend it’s OK.”

He explained that fellow actor Denzel Washington, who also spoke to Smith during a break, had told him: “At your highest moment, be careful, that’s when the devil comes for you.”

“I want to be a vessel for love,” Smith continued. “I want to be an ambassador of that kind of love and care and concern. I want to apologize to the Academy and all my fellow nominees. […] I look like the crazy father just like they said about Richard Williams, but love will make you do crazy things,” he said. He then joked about his mother, who had not wanted to come to the ceremony because she had a date with her crochet group.

The Los Angeles Police Department released a statement last night saying that Chris Rock would not be filing any charges for assault against Smith. “LAPD investigative entities are aware of an incident between two individuals during the Academy Awards program,” the statement read. “The incident involved one individual slapping another. The individual involved has declined to file a police report. If the involved party desires a police report at a later date, LAPD will be available to complete an investigative report.”

On December 28, Pinkett Smith spoke on social media about her problems with alopecia. She stated that she would be keeping her head shaved and would be dealing with the condition with humor. “Me and this alopecia are going to be friends… Period!” she wrote on Instagram.



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House-price inflation set to stay double digit for much of 2022

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House-price inflation is expected to remain at double-digit levels for much of 2022 as the mismatch between what is for sale and what buyers want continues.

Two new reports on the housing market paint a picture of a sector under strain due to a lack of supply and increased demand driven by Covid-related factors such as remote working.

The two quarterly reports, one each from rival property websites myhome.ie and daft.ie, suggest asking prices accelerated again in the first quarter of 2022 as the stock of homes available for sale slumped to a new record low.

Myhome, which is owned by The Irish Times, said annual asking-price inflation was now running at 12.3 per cent.

Price

This put the median or typical asking price for a home nationally at €295,000, and at €385,000 in Dublin.

MyHome said the number of available properties for sale on its website fell to a record low of 11,200 in March, down from a pre-pandemic level of 19,000. The squeeze on supply, it said, was most acute outside Dublin, with the number of properties listed for sale down almost 50 per cent compared with pre-pandemic levels.

It said impaired supply and robust demand meant double-digit inflation is likely until at least mid-2022.

“Housing market conditions have continued to tighten,” said author of the myhome report, Davy chief economist Conall Mac Coille.

“The broad picture of the market in early 2022 remains similar to last year: impaired supply coupled with robust demand due to Ireland’s strong labour market,” he said.

Soure: MyHome.ie

“One chink of light is that new instructions to sell of 7,500 in the first 11 weeks of 2022 are well up from 4,800 in 2021, albeit still below the 9,250 in 2019. The flow of new properties therefore remains impaired,” said Mr Mac Coille.

“Whatever new supply is emerging is being met by more than ample demand. Hence, transaction volumes in January and February were up 13 per cent on the year but pushed the market into ever tighter territory,” he said.

He said Davy was now predicting property-price inflation to average 7 per cent this year, up from a previous forecast of 4.5 per cent, buoyed strong employment growth.

Homes

Daft, meanwhile, said house asking prices indicated the average listed price nationwide in the first quarter of 2022 was €299,093, up 8.4 per cent on the same period in 2021 and and just 19 per cent below the Celtic Tiger peak, while noting increases remain smaller in urban areas, compared to rural.

Just 10,000 homes were listed for sale on its website as of March 1st, an all-time low. In Dublin, Cork and Galway cities, prices in the first quarter of 2022 were roughly 4 per cent higher on average than a year previously, while in Limerick and Waterford cities the increases were 7.6 per cent and 9.3 per cent respectively.

The report’s author, Trinity College Dublin economist Ronan Lyons, said: “Inflation in housing prices remains stubbornly high – with Covid-19 disturbing an equilibrium of sorts that had emerged, with prices largely stable in 2019 but increasing since.

“As has been the case consistently over the last decade, increasing prices – initially in Dublin and then elsewhere – reflect a combination of strong demand and very weak supply.”


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