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Norway Inflation Highest Since 1988

Norway's consumer price inflation accelerated unexpectedly in July to its strongest level in thirty-four years, and producer prices continued to log strong growth amid higher energy prices, data from Statistics Norway showed on Wednesday.

Consumer price inflation rose to 6.8 percent in July from 6.3 percent in June. Economists had forecast inflation to remain stable at 6.3 percent.

A similar high inflation was last reported in July 1988.

The annual increase was largely driven by an 11.2 rise in transport costs. This was followed by a 10.4 percent gain in prices for food and non-alcoholic beverages.

Utility costs grew 6.8 percent and those for restaurants and hotels rose 8.5 percent.

On a monthly basis, consumer prices moved up 1.3 percent in July versus an expected increase of 0.9 percent.

Core inflation, which excludes energy prices and tax changes, accelerated to 4.5 percent in July from 3.6 percent in the previous month. The expected rate was 3.8 percent.

The EU harmonized inflation increased to 7.3 percent in July from 7.0 percent in June. Month-on-month, the harmonized index of consumer prices rose 1.4 percent.

In a separate report, the statistical office said producer price inflation quickened to 73.6 percent in July from 68.8 percent in June.

Prices for energy goods alone surged 138.3 percent and those for extraction and related services jumped 132.9 percent.

On a monthly basis, producer prices advanced 7.5 percent in July, just above the 7.2 percent rise in the prior month.

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