For the fourth straight year, Denmark will see consumer price increases below 1% in 2016, an occurrence that hasn't happened since the early 1930s.
Also, the cost of services has reached its lowest level in more than 50 years.
Inflation is at a standstill in Denmark, despite years of below-zero rates. A chief economist says Denmark's monetary policy has fallen way short of expectations.
Read this excerpt from an Oct. 10 Bloomberg article:
Denmark boasts the world’s longest history of negative interest rates. But far from stimulating price growth, the monetary climate has coincided with the longest period of low inflation since the Great Depression, according to Danske Bank A/S.
The central bank in Copenhagen, which defends the krone’s peg to the euro, has mostly kept its benchmark deposit rate below zero since mid-2012. Since then, inflation has petered out, with a report on Oct. 10 showing Denmark’s consumer prices stagnated in September from a year earlier.
The negative rate environment has brought with it a number of surprises. [The] chief economist at Nordea Bank AB in Copenhagen, says it’s also worrying that investment has failed to pick up. …
If you bought Denmark’s 2023 inflation linked bond in the first half of 2014, you would have lost 10 percent relative to investing in the country’s benchmark 10-year nominal bond. …
Much of the decline in inflation has come from lower energy prices since 2014. But an almost 90 percent rebound in Brent crude since January has so far had a limited effect on consumer prices.
You can read the entire article by following the link below:http://www.bloomberg.com/news/articles/2016-10-10/depression-era-inflation-coincides-with-record-in-negative-rates