This is up from 3.3 per cent from September. The increase is 0.7 percentage points. The price of food and non-alcoholic beverages rose by 0.9 per cent, while clothing and shoes fell by 1.1. – This was far beyond expectations. It was a clear increase that was bigger than expected, says chief economist Harald Magnus Andreassen at Sparebank 1 Markets. – This is probably a figure that leans against Noregs Bank raising interest rates in December. There was a sharp increase in prices on a monthly basis from September to October, even if we disregard the rising electricity prices, says Magnussen. Chief Economist Harald Magnus Andreassen believes that this speaks strongly against Norway’s bBank raising interest rates in December. Photo: CF-WESENBERG – Have to tap the savings account At a grocery store at the University of Molde, Filip Ketil Hoset is early in the process. He says he knows the price increase. – Definitely. It now ends with me having to tap the savings account. It also affects the student’s weekday. I have to work a lot more. I am a student, so there are quite a few more shifts at weekends. I would like to do other things, but I end up working, yes, says Hoset. Filip Ketil Hoset is a student in Molde. Price increases and probably higher interest rates mean that he has to eat into his savings account, he says. Photo: Roar Jonny Strøm / news Significant change Interest rate and currency strategist Nils Kristian Knudsen at Handelsbanken also sees that it is now more likely that Norges Bank will raise interest rates in December. – This was pretty much back on track that Norges Bank envisioned in September. The change is significant, he says. Norges Bank is trying to reduce price growth to an annual growth rate of 2 per cent. Now the underlying price increase is 6 per cent, according to Statistics Norway. The aim of the jump in interest rates in the last two years is, among other things, to dampen the economy’s desire for goods and services, so that companies have to slow down price increases in order to sell goods. Before Noregs Bank has its interest rate meeting in December, one more price figure will come. In addition, they will receive an important track report from the companies in Norges Bank’s regional network. According to Knudsen, it could be decisive for whether interest rates should rise again. – The update from the regional network focuses more on the real economy and what is expected of both growth, employment, profitability and price plans going forward, says Knudsen. Nils Kristian Knudsen in Handelsbanken: – The price increase is significant. Photo: Handelsbanken Weak Norwegian krone In recent years, the Norwegian krone has weakened by around 20 per cent against the euro. The krona has also lost 25 percent against the US dollar. At the same time, several economic experts fear that the weak krone exchange rate could give us higher inflation in the future, and that this could also affect the level of Norwegian interest rates. On Wednesday this week, one euro cost NOK 12.1. This adjusted down to under NOK 12 after a few hours. Reduced price growth in September Prices also rose in September, but far less than both Norges Bank and most economic commentators had expected. The price increase was surprisingly low, and an expectation was created that the increase in interest rates has had the desired effect and that interest rate increases for the rest of 2023 became less likely. On 2 November this year, Norges Bank chose to keep the interest rate unchanged at 4.2 per cent. Central bank governor Ida Wolden Bache announced at the same time that the key interest rate would be reviewed in December. Policy rate The policy rate is Norges Bank’s most important instrument for stabilizing price growth and development in the Norwegian economy. The key interest rate in Norway is the interest that the banks receive on their deposits in Norges Bank up to a fixed amount – a quota. The key interest rate and expectations about future developments in the key interest rate primarily affect the interest rates between banks and the interest level the banks offer on deposits and loans to their customers. Market interest rates in turn affect the krone exchange rate, the prices of securities, house prices and the demand for loans, consumption and investments. Source: Norges Bank
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Prices rose by 4 percent in October shows the consumer price index cpi – news Møre og Romsdal – Local news, TV and radio
