One conclusion is that measures of price changes over periods shorter than one year are usually not very good at forecasting future inflation measured as an annual percentage change in the CPIF. However, over the past five years, which includes the period of rapidly rising and then rapidly falling inflation, measures calculated over shorter periods have been better, relatively speaking. It may therefore be worthwhile to analyse this type of measure during periods of large changes in the inflation rate. But under normal circumstances they are too volatile and contain too much 'noise' to be useful.

In this Economic Commentary, the forecasting ability of CPIF inflation for a number of measures of core inflation and their correlation with resource utilisation has been evaluated. One of the aims of this has been to investigate how measures based on more high-frequency changes, which have started to be used since the pandemic, compare with the usual measures based on annual percentage changes, which the Riksbank has used for a long time.