Danish prices drop for first time in 60 years

Dropping oil prices cause Denmark to slip into a recession but economists stress that it is "good news for the Danish economy" and not a sign that the nation is "about to be caught in a vicious deflationary spiral".

Danish prices drop for first time in 60 years
The lowest prices since 1954 will hopefully spark stalled consumer spending. Photo: Bax Lindhardt/Scanpix
Danish consumer prices fell in January for the first time since 1954 after energy prices collapsed, following the eurozone into negative territory while raising hopes it could boost Denmark's anaemic consumer spending.
The prices of goods and services dipped 0.1 percent in January after rising 0.3 percent the month before, Statistics Denmark said.
Stripping out the cost of energy and non-processed food, prices rose 0.8 percent.
"It is worth underscoring that the current situation is good news for the Danish economy," Nordea economist Jan Størup Nielsen wrote in a note to investors.
"As long as lower inflation is due to falling energy prices and fees it is helping to support the purchasing power of Danish households," he said.
Danish consumers have reined in spending since housing prices began a protracted slide in 2007, leaving the country with one of the world's highest levels of household debt.
Deflation means they have more money to spend at the end of the month, but it could also lead to consumers putting off buying big ticket items if they expect prices to fall further.
However, Handelsbanken economist Jes Asmussen said the deflation was unlikely to last.
"Looking at the trends in the price of services, wages, house prices and consumer expectations for inflation in Denmark, there is nothing to suggest that the Danish economy is about to be caught in a vicious deflationary spiral," he said according to business daily Børsen.

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‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers.