Norway hikes interest rates again as inflation remains elevated

Norges Bank raises its key policy rate by 25 basis points to 2.75%

The central bank warns that inflation is still too high and that further rate hikes may be needed

Norway's central bank, Norges Bank, has raised its key policy rate by 25 basis points to 2.75%. This is the fifth rate hike this year, as the bank tries to tame inflation, which is currently at a 13-year high of 6.3%. Norges Bank also warned that further rate hikes are likely in the coming months.

The decision to raise interest rates was widely expected by economists, who had been predicting a 25 basis point hike since the bank's previous meeting in June. However, some had hoped that the bank would signal that it was nearing the end of its rate hike cycle, as the economy is beginning to slow and inflation is expected to ease in the coming months.

However, Norges Bank's statement was more hawkish than expected, with the bank warning that inflation is still too high and that further rate hikes may be needed. Norges Bank now expects inflation to remain above its target of 2% until late 2024.

The bank's decision to continue raising interest rates is likely to put further pressure on Norwegian households and businesses. The cost of borrowing is now at its highest level since 2011, and further rate hikes could lead to a slowdown in economic growth.

However, Norges Bank believes that raising interest rates is necessary to bring inflation under control and to protect the Norwegian economy in the long run. The bank's goal is to bring inflation back to its target of 2% over the next two years.

Styringsrente Norge