Norges Bank is following its plan and is keeping its key interest rate unchanged in November. Another interest rate hike is announced in December.
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It is reported by the Committee for Monetary Policy and Financial Stability of Norges Bank in a press release from Thursday.
- In the opinion of the committee, the normalization of the economy indicates that it will be appropriate to further increase the key interest rate from the current level. Uncertainty about the effects of higher interest rates indicates that the key rate will be raised gradually, they write.
Uncertainty
They point out that the reopening of society has given a significant boost to the Norwegian economy unemployment is falling, inflation is high. However, core inflation is lower than the inflation target.
Looking ahead, increased economic activity and rising wage growth are likely to drive core inflation up, but the recent strengthening of the koruna may dampen price growth, writes Norges Bank.
They also note that there is still uncertainty about the further course of the pandemic and its impact on the Norwegian economy.
- The infection has risen again recently, but high vaccination rates are likely to reduce the need for new remedies. The Committee was also concerned that disruptions in international production chains could undermine economic growth and contribute to higher price inflation domestically as well.
Change probably in December
Economists expect Norges Bank to follow its plan and raise the rate in December percentage from 0,25 percentage points to 0,5. They indicate that registered unemployment continues to decline in line with Norges Bank's estimates.
Norges Bank maintains the main interest rate
During a pandemic that caused the biggest setback for the Norwegian economy since the war. Interest rates remained at record low level of 0 percent. It was only raised again in September, for the first time since May 7, 2020.
During the previous meeting on interest rates, Norges Bank stated that the plan for the coming year was to gradually raise the key interest rate from 1 point to 1,7%. by the end of 2024
This means that mortgage rates could rise from the current 1,8%. up to 3,2 percent in 2024
Source: NTB
Photo: Lise Åserud / NTB
